On August 31, 2020 Japan extended an Emergency Support Loan of up to 50 Billion Japanese Yen (Approximately Rs 3, 500 Crore) to support India’s response to the COVID-19 crisis. The financial support will support India’s implementation of health, medical policies and development of hospitals equipped with ICUs.
Note – This is the largest financial assistance announced by any country to support India’s response to the Covid-19 crisis.
Loan Agreement:
Before the signing of the notes, Mohapatra and Katsuo Matsumoto, Chief Representative, Japan International Cooperation Agency (JICA), New Delhi signed the Loan Agreement for the programme loan.
Exchange of Notes:
Additional Secretary, Department of Economic Affairs of the Finance Ministry, CS Mohapatra and Japanese Ambassador Suzuki Satoshi exchanged the notes for the loan.
Key Points:
i.According to the terms and conditions of the loan, there will be an interest rate of 0.01% per annum, a redemption period of 15 years, and also includes a four-year grace period.
ii.The loan aims to support India’s efforts in fighting COVID-19 by preparing the health system to manage future epidemics and to improve the resilience of India’s health systems against infectious diseases.
iii.The loan will have widespread impacts on the economy and health sector of India.
iv.It is expected to enhance the use of telemedicine using digital technology in villages across India.
Provision of Grant Aid:
i.India and Japan also exchanged notes for provision of grant aid worth 1 Billion Yen under Japan’s Official Development Assistance scheme for India’s Economic and Social Development Programme. It will be implemented by the Health Ministry.
ii.The programme will provide oxygen generators to the Government of India. Which will be employed for treatment of Covid-19 patients in critical conditions.
iii.The programme will strengthen India’s countermeasures to the infectious disease.
About Japan:
Capital – Tokyo
Prime Minister – Shinzo Abe (He announced his retirement on August 28 but will remain in the post until a successor is chosen)
Currency – Japanese Yen
