On August 31, 2020, the Japanese Government announced that it will provide loan assistance of Rs 3,500 crores to India as a response to COVID-19 crisis. This will also include implementation of health and medical policy. The loan is being received by India as an emergency fund.
Highlights
- The loan agreement was signed by Japan International Cooperation Agency in New Delhi. It has an interest of 0.01% per annum along with a redemption period of 15 years.
- India and Japan also exchanged notes worth 1 billion Yen through a Japanese scheme called “The Economic and Social Development Programme”. It is one of Japanese official developmental assistance programme.
Objective
The main objective of the loan is to provide necessary fund for India’s fight against COVID-19. It will be used to develop hospital equipment, ICUs and management facilities.
India-Japan relations
Civil Nuclear Cooperation
India is not a signatory of Non-Proliferation Treaty. It is the only non-signatory to receive exemption from Japan to receive fuel to nuclear reactors.
QUAD
Both Japan and India counter actions of China in the Indo-Pacific. It was under the initiatives of these two countries that QUAD grouping was formed. It includes Australia and USA as well.
Military Exercises
- The military exercise between Indian Army and the Japanese Army is called Dharma Guardian
- The bilateral exercise between Indian Air Forces and the Japanese Air Force is called the Shinyuu Maitri
- Japan also participates in the India-US Malabar Navy Exercise
- Japan has also joined the “Cope-India”. It is India-US air Force Exercise
Act East Policy
The Act East Policy of India and the Free and Open Indo-Pacific Strategy of Japan converge at the North East Region of India. India has allowed Japan to deposit in the north east region of India at large scale. Also, the countries are teaming up to set up a diesel power plant in Andaman and Nicobar Islands.
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