TOKYO – Japan said Tuesday it would buy a major stake in an Indian company at the centre of a huge infrastructure building project, marking Tokyo’s latest investment in the South Asian giant.
The government-linked Japan Bank for International Cooperation would purchase a 26 percent stake in the Delhi-Mumbai Industrial Corridor Development Corp. (DMIC), Japanese industry minister Yukio Edano said.
The Indian firm has been charged with building massive projects linking Delhi and Mumbai including a freight railway between the two Indian cities.
Other projects include industrial parks and power stations that are expected to be built around the rail line.
In December, Japanese Prime Minister Yoshihiko Noda promised roughly $4.5 billion in financial support for the state-funded Indian firm’s projects.
The stake in DMIC will cost the Japanese bank 260 million rupees ($4.7 million) with one of its executives to sit on the company’s board.
The investment comes as Japan looks to boost its footprint in Asia’s biggest democracy amid simmering diplomatic tensions with neighbouring China and South Korea.
However, deadly labour unrest at a plant operated by Maruti Suzuki, India’s largest carmaker, which is owned by Japanese automaker Suzuki Motor.
A riot by workers last month at the Maruti vehicle factory led to the death of a manager and injury to 96 supervisors.
– Dow Jones Newswires contributed to this report –