New Delhi, March 8: Japan has offered India loans to buy advanced equipment for the new IIT in Hyderabad but declined to buy them itself, handing the collaborative project its latest setback.

Delhi had requested Tokyo to buy the equipment to salvage the hyped collaboration that is threatening to fall apart.

India is unlikely to accept that loans are a good enough financial contribution from Japan to warrant calling the IIT a joint venture, as announced last year during the Prime Minister’s Japan visit.

The loan offer is part of the latest draft agreement on the IIT that Japan has crafted and handed over to India, sources said.

They said the human resource development (HRD) ministry was yet to finalise its position on the draft, but added that Delhi was unlikely to accept the new terms.

“We don’t need a loan — the government can borrow from India’s own banks. The idea was financial support, which Japan has once again not offered,” a source said.

Last month, a team of Japanese officials had met higher education secretary R.P. Agrawal at the HRD ministry to resolve what sources said was increasingly resembling a deadlock.

Indian officials claim that Japan had initially agreed to help India financially to set up the IIT. The blueprint for the institute’s curriculum included courses in the Japanese language and Japanese management techniques.

But last year, Tokyo told Delhi it could not contribute financially towards setting up the institute but insisted that it be termed a joint project, implying equal contribution from both nations.

Indian officials raised their concerns with Tokyo. The matter was brought up during the Prime Minister’s Japan visit late last year, too, but could not be resolved during the trip. As reported by this newspaper on January 29, India suggested to Japan that it buy equipment for the institute if it could not provide financial support in any other way.

“Japan’s latest response has placed the planned collaboration on an extremely sticky wicket.… The future of the collaboration appears uncertain,” a senior official said.

Apart from offering the loan, Japan has reaffirmed its earlier commitments. These include faculty and student exchange programmes, and Japanese companies such as Mitsubishi training the institute’s students and offering them summer internships.

India, however, has argued that the existing IITs already have similar faculty and student exchange programmes with institutions in several countries, especially in Europe.

Also, the IITs have their individual agreements with leading multinational companies for projects similar to those that Japanese companies can offer.

The IITs in Mumbai, Chennai, Kanpur and Delhi have received a combination of technical and financial assistance from other countries — the former USSR, Germany, the US and Britain, respectively.

“The older IITs have received more assistance than anything Japan is offering, but those were never called collaborative efforts though we sincerely recognise every bit of contribution from our foreign friends,” a senior official said.

“Japan simply has to do more if it wants the IIT to be called a joint venture.”