The Indian Government has agreed to make a US$9 million (approximately J$608m) line of credit available to Jamaica through the Ex-Im Bank of India.
The loan will facilitate the purchase of equipment to support Jamaica's rural water development programme.
Prime Minister Portia Simpson Miller secured the line of credit on Saturday during bilateral talks held with India's Minister of State for External Affairs, Anand Sharma, who is in the island on a two-day visit.
A release from the Office of the Prime Minister said the money would also be used to provide equipment and machinery for the small business sector.
India has also agreed to assist in the training of Jamaicans in areas of information technology.
The Indian junior minister has also expressed interest in supplying Jamaica with medication for serious illnesses, as well as partnering in the modernisation of the sugar industry.
During the meeting, an invitation was issued to Prime Minister Simpson Miller to visit India, and for Jamaica to open a diplomatic mission in New Delhi.