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Why Japan is pouring lakhs of crores in cut-rate loans to build infrastructure across India

Discussion in 'International Relations' started by Blackjay, Sep 17, 2017.

  1. Paliwal Warrior

    Paliwal Warrior Lt. Colonel ELITE MEMBER

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    Of course

    In any such projects core tech / product will be sourced from. Financing country

    While most of the non core no. Propereitory items are locally sourced

    Eg
    India is constructing a dfc with jica finance
    Now if you go through ir thread you will know that ir is negotiating with Japan for locos to run on dfc

    But the deal is stuck on price now ir is trying to develop alternative options

    Also many non propereitory items like concrete for making sleepers, iron tracks , sand for levelling etc will always be locally sourced


    Even in case of bullet trains most of the propereitory items will be procured from Japan

    Again it may happen that some component may be sourced by Japan from third countries
     
  2. Agent_47

    Agent_47 Admin - Blog IDF NewBie

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    Show me an example like this of HSR loan to any developing ?
     
  3. Paliwal Warrior

    Paliwal Warrior Lt. Colonel ELITE MEMBER

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    The issue is not the project but the interest rate

    Is the interest rate preferential for India ?

    No it is the going market rate for yen
     
  4. Som Thomas

    Som Thomas 2nd Lieutant FULL MEMBER

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    So what exactly is your issue here?

    Is it a problem that Japanese are providing loans interest rate from 0.1-1.4% with loan repayment period from between 30-50 years. It mentions specifically a rider that 30% of the project contract by value must go to Japanese firms(so rest 70% can be sourced from where ever one wants from). From a polity stand point anyone would grab this opportunity( see CPEC loan repayment plan). The Pakistanis would bow their heads with shame signing exorbitant rates with the Chinese. Plus they are the technology, capability, capacity and the money( remember Japanese have a foreign exchange reserves close to ~1.2 trillion, this excludes gold reserves ). This also means future buissness investment and collaboration in term of Science, Engineering, technology and management skills which we can emulate.

    I would say this a good Initiative and I don't understand what you are whining about.
     
    SR-91 likes this.

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