India to give $5 bn LOC to B'desh during PM visit
India will extend the new Line of Credit of 5 Billion US dollars to Bangladesh, and this will be finalised during the visit of Bangladesh Prime Minister Sk Hasina to India. The visit is scheduled from April 7 to April 10. Also, it has been confirmed by Economic Advisor of Bangladesh Prime minister Dr. Masiur Rahaman.
Earlier, India extended one billion LOC to Bangladesh which was fully utilised by Government for developmental projects. Later, during Narendra Modi's visit, a new soft loan of two billion dollars was extended.
According to Dr Rahaman "The five billion dollars is an open LoC, we can use it to enhance the level of trade, movement, connectivity. The projects are yet to be identified and there is no timeline. We can spend it all at once, or as we need it. But where the Indian side has an interest is in railway projects, road transportation, road maintenance and so on."
When asked about the Chinese promise of 24 Billion dollars for the development of Bangladesh, the Rahaman said, "The main difference is, in the case of China, the project is identified first and then the money comes in. With India, you get the promise of money first, and then they identify the projects. You are probably referring to the promise of $24 billion during President Xi Jinping's visit. We always have to consider how much we can absorb at a time."
Also, he stated that, "We also have about $18 billion in the pipeline in concessional loans from international aid agencies. In the case of India, before 1947, this was all one territory connected. Then we dismantled some of the transport systems, so it is easier to identify what we had, and then work on reconnecting those areas. With China, these will be new industries, or lines that have not been there. We have used Chinese loans for some time, so we have many people in Bangladesh who know how to deal with China. When dealing with India we don't have as many at present."
When asked about China's one road one belt project, he stated that on this project, a sense connects to the plans in the 1950s of an Asian highway that would connect to India and Bangladesh by rail and road. "It never took off, because ESCAP has the idea but not money. China has both, but it has not identified specifically what the infrastructure would be. The major connection in terms of trade and investment cooperation is between China and India."
A five-year defence cooperation has also been finalised which will be signed during Sk Hasina's visit to India. India will provide a 500 MillionUS dollar loan to Dhaka to procure some hardware from India, stated the deal.