India and JBIC weigh critical mineral fund for supply chains

Indian Finance Minister Nirmala Sitharaman met Japan Bank for International Cooperation Governor Kazuhiko Amakawa on Oct. 16 to evaluate a follow-on facility to their $600 million clean energy fund.

The bilateral discussions took place in Bangkok on the margins of the annual meetings of the International Monetary Fund and the World Bank. The talks centered on stabilizing industrial procurement across critical sectors.

The existing $600 million India-Japan Fund forms the institutional baseline for the negotiations. The state-backed vehicle was launched in October 2023 under the National Investment and Infrastructure Fund, known as NIIF.

JBIC contributed 51% of that anchor capital, with the Indian government providing the remaining 49%. The fund was mandated to deploy equity into low-carbon mobility, bioethanol and cross-border manufacturing corridors over a three-year cycle.

Both sides examined expanding their joint financing remit into critical mineral processing, semiconductors and advanced manufacturing, India's Ministry of Finance said in a post-meeting readout. The agency noted that both parties explored establishing a successor fund.

Capital from the initial fund is already committed across key mobility assets. The vehicle directed equity into Pinnacle Mobility Solutions, which operates electric bus manufacturer EKA Mobility, to scale commercial fleet production across western India.

Upstream energy processing also secured bilateral support under earlier JBIC arrangements. JBIC extended a 60 billion yen ($395 million) credit line alongside Power Finance Corporation to build a bamboo-based bioethanol refinery in the northeastern state of Assam.

Amakawa emphasized JBIC's expanding equity footprint in India's logistics planning during the Bangkok session. The Japanese policy lender holds a 26% equity stake in the National Industrial Corridor Development Corporation, known as NICDC.

That corridor agency oversees the trunk infrastructure for industrial nodes across the country. JBIC is leveraging that position to steer Japanese component makers and chemical suppliers into emerging manufacturing belts.

The primary target for Japanese industrial interest is the Dholera Special Investment Region in Gujarat. The industrial cluster is designated as India's premier hub for commercial semiconductor fabrication and specialty chemical processing.

Sitharaman urged JBIC to broaden its investment footprint beyond traditional metropolitan corridors, the ministry said. She requested dedicated institutional capital for artificial intelligence infrastructure and data center parks located in Tier 2 and Tier 3 cities like Visakhapatnam.

The official agenda also incorporated critical minerals into bilateral industrial planning. Both Tokyo and New Delhi have sought to insulate downstream battery makers and electronics assemblers from raw material supply bottlenecks.

External reporting on Oct. 16 suggested that India and JBIC discussed direct equity investments into critical mineral exploration and refining ventures across Africa. That characterization conflated official talks with separate industry proposals.

The official ministry readout does not state that India and JBIC agreed to or reviewed mineral projects in Africa, leaving third-country joint ventures absent from government documentation.

The African resource angle instead mirrored policy commentary published by foreign policy journals on Oct. 15. The analysis examined how India and Japan could coordinate outward development capital to challenge concentrated mineral processing networks.

Indian business lobbies had floated parallel ideas two months earlier. During an official trade mission to Tokyo on Aug. 25, Federation of Indian Chambers of Commerce and Industry President Anant Goenka proposed joint private ventures in Africa.

Goenka urged Indian miners and Japanese trading conglomerates to combine capital to secure lithium, cobalt and nickel assets overseas. That private proposal has not been incorporated into formal JBIC lending facilities.

Japan relies on overseas sources for nearly 100% of its critical mineral feedstocks, including rare earth elements, battery-grade nickel and processed lithium. State agency JOGMEC typically co-finances upstream extraction alongside private trading houses.

India faces similar procurement exposure as domestic electric vehicle adoption rises. The country imports roughly 95% of its lithium chemicals and relies entirely on external refining for separated heavy rare earths used in permanent magnets.

Tokyo and New Delhi have accelerated bilateral supply chain diplomacy to address those vulnerabilities. However, official institutional mechanisms remain concentrated inside Indian domestic borders through the NIIF architecture.

JBIC operates under expanded statutory authority following amendments to the JBIC Act in 2023. Those legal revisions permit the state lender to finance foreign companies that supply critical materials directly to Japanese manufacturing networks.

JBIC launched its Japan Strategic Investment Facility in October 2025 to operationalize that mandate. The facility provides flexible, uncapped financing across semiconductors, critical minerals, pharmaceuticals and artificial intelligence through March 2029.

Whether the proposed follow-on India-Japan Fund will utilize those cross-border authorities to invest in processing outside India remains undetermined. Indian officials indicated that negotiations on fund structure and allocation limits will continue through the current fiscal quarter.

The initial $600 million India-Japan Fund reaches the end of its three-year deployment window in late 2026. Bilateral working groups are scheduled to review fund capitalization metrics ahead of the annual India-Japan summit in early 2027.