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Japan signs biggest loan deal with India

Posted by Yogesh on Wednesday, 22 October, 2008

TOKYO: Japan on Tuesday signed its biggest ever loan deal for an overseas project to help India build a major railway between New Delhi and Mumbai.

Indian Prime Minister Manmohan Singh and his Japanese counterpart Taro Aso signed the deal at a summit in Tokyo. Japan will initially provide some 450 billion yen ($4.5 billion) in low-interest loans to India.

India will use the money to build a freight railway between its political and economic capitals, hoping to improve its creaky infrastructure blamed for holding back the fast-growing economy.

The joint statement said that the so-called Western Corridor, which will also include economic projects around the railway, would be “the new flagship project of India-Japan cooperation.” The two leaders “also recognised that there is still immense untapped potential for the expansion of bilateral relations,” it said.

Aso, who took office last month, has long advocated building relations with fellow democracy India to offset frequent tension in Japan’s relationship with China. Source The Economic Times

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