The Japan Bank for International Cooperation (JBIC; Governor: HAYASHI Nobumitsu) signed on March 5 a loan agreement amounting to up to USD100 million, of which JBIC's portion is USD60 million, with IndusInd Bank Limited, India (an Indian scheduled private sector bank). The loan is co-financed with Mizuho Bank, Ltd., the Joyo Bank, Ltd. and the Shiga Bank, Ltd. JBIC will also provide a guarantee for the portion co-financed by the private financial institutions.
The loan is intended to finance the funds necessary for the manufacturing and sales businesses of the local suppliers and dealers of Japanese agricultural machinery manufacturers and also for the local sales finance businesses to sell Japanese farm equipment.
India is one of the world's largest agricultural machine markets by units sold, and it also became the world’s most populous country in 2023. As India’s demand for food will surge, the market is expected to further expand. Given its high potential for growth and its role as a hub for exports to the Global South countries, Japanese agricultural equipment makers position India as an important base. The loan will financially support the general manufacturing and sales activities of Japanese farming machinery manufacturers in India, thereby supporting the enhancement of local supply chain resilience and contributing toward maintaining and improving the international competitiveness of Japanese industry.
In September 2014, the Government of India launched the Make in India campaign to strengthen Indian manufacturing and make India a global investment destination by encouraging foreign investment from all around the world. It also announced the Sub-Mission on Agriculture Mechanization scheme in 2014–2015, which aims to modernize India’s agriculture by providing subsidies for purchases of machinery and promoting the mechanization of small-scale farms. These are urgent issues that should be addressed to respond to food demands in India. The loan will strengthen India’s manufacturing and contribute toward modernizing its agriculture while enhancing the supply chain resilience of Japanese agricultural equipment makers in India. It will also help to solve the country’s food issues, in line with the Government of India's policy.
As Japan's policy-based financial institution, JBIC will continue to support improving the business environment of Japanese companies in India by drawing on its various financial facilities and schemes for structuring projects and by performing its risk-assuming function.
