Role of Japanese official development assistance in enhancing infrastructure development in India

Abstract

Assistance to India from Japan under its Official Development Aid (ODA) programme has been particularly important for infrastructure development. India has been the single largest recipient of Japanese ODA since 2003–2004. Most of it has been directed towards long-term participation in infrastructure, much of which comes from the enormous demand. With the Indian Prime Minister’s visit on 3 August 2014, Japan committed to invest $35 billion in different sectors focusing on infrastructure in the coming five years. This investment will boost India’s infrastructure sector. Poor infrastructure is a constraint to sustaining India’s high and inclusive growth rate. One major bottleneck in infrastructure development is infrastructure financing (along with many others, such as land acquisition, environment clearance, and cost-time overruns). In this context, the paper explores the impact of Japanese ODA on the infrastructure sector in India, the trends and priority sectors for Japanese ODA, and the problems and challenges of this developing relationship.