India is expected to become the biggest recipient of Japan's long-term, low-interest yen loans for the first time in fiscal 2003, taking over the position held by China since fiscal 1999, government sources said Thursday.

While country-by-country loan amounts in fiscal 2003 will be determined at the end of March, China will not be the biggest recipient.

Japan will substantially cut its official development assistance to Beijing due to the rapid growth of the Chinese economy, the sources said.

Yen loans to China, which peaked at 214.4 billion yen in fiscal 2000, are expected to be cut by more than 10 percent in fiscal 2003 from the previous year's 121.2 billion yen.

The government may expand yen loans to India to support such projects as road building and construction of power generation facilities.