New Delhi: The Japan Bank for International Cooperation (JBIC), a public financial and export credit institution, is ready to support investments in India’s semiconductor supply chain, Governor Hayashi Nobumitsu said on Wednesday.
“We can share the supply chain with India… so that we can continue to have semiconductor supply chains with our friendly countries,” Nobumitsu said at a seminar organised by the Centre for Social and Economic Progress (CSEP).
He said Japanese companies could help with supply chains for semiconductors in indiaas Prime Minister Narendra Modi’s government is keen to turn the South Asian country into a hub.
The Indian government plans to launch the next phase of the India Semiconductor Mission in the next six months, Electronics and Information Technology Minister Ashwini Vaishnaw said earlier this month, adding that a significant amount of funding has been allocated for the next phase, which will focus on developing new areas, including Greater Noida, as semiconductor hubs.
He Semiconductor Missionwhich was launched in December 2021, has ₹Rs 76 billion has been allocated as production-linked incentives to help companies set up semiconductor factories, testing facilities and design houses in the country.
Highlighting India’s growing attractiveness as an investment destination for developed countries like Japan, Nobumitsu said: “Earlier, (for investors) India was the investment destination for the future as they invested in China. But over the past two years, India has overtaken China as a short-term destination (for investment), partly due to China’s unpopularity and India’s growing popularity.”
In October 2023, the government-backed JBIC and India’s National Investment and Infrastructure Fund (NIIF) launched a $600 million fund to invest in climate and environmental initiatives in India, with the Japanese side providing 51% of the capital and the Indian side 49%.
The fund focuses on low-carbon and environmental sustainability strategies.
In addition to financing Japanese companies trading with India, JBIC has also financed several Indian companies.
In March, the state-backed NTPC group also entered into foreign currency loan agreements with JBIC, totalling approximately ₹1,650 crore each for NTPC Ltd and NTPC Renewables Energy Limited (NREL).
While JBIC provided 60% of the facility amount, the balance provided by other commercial banks was under JBIC’s guarantee.
In August, the state-owned Power Finance Corporation (PFC) obtained a loan of approximately ₹147 crore from JBIC for wind power project.
“We want to invest more in Indian startups in the environmental space,” he added.
Nobumitsu said challenges faced by Japanese companies in India include cultural and food issues, as well as red tape and delays in implementing laws. “However, we want to continue working with India and resolve those challenges,” he added.
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