Express News Service
NEW DELHI: India’s Lines of Credit (LOC) to its neighbours have increased more than fourfold since 2014. From $3.27 billion in 2014, it rose to $14.7 billion in 2020. The bulk of India’s worldwide soft lending, almost 50 per cent of India’s global envelope, goes to its partners in the neighbourhood. The largest concessional credit given by India to any single country has been to Bangladesh.
“We have extended three LOCs for $8 billion to Bangladesh, the largest concessional credit given by India to any single country. We are also developing two Indian Economic Zones at Mirsarai and Mongla in Bangladesh,” said Commerce andIndustry Minister Piyush Goyal on Tuesday during the inaugural session of the India-Bangladesh Stakeholders meet.
Sri Lanka too has been majorly dependent on loans from India, due to its failing economy.
Sri Lanka has received support totalling over $1.4 billion of which $400 million was a currency swap and $500 million was loan deferment and $500 million LOC for fuel imports. A further $1 billion assistance under negotiations is being processed which is likely to be cleared by the time Sri Lanka’s Finance Minister Basil Rajapaksa visits India later this month.
The other countries that have received LOCs in the neighbourhood are Nepal ($1.65 billion), Myanmar (476 million) and Maldives ($1.3 billion).
“The Neighbourhood First Policy, at the instance of the Prime Minister, accords the highest priority to our relations with Afghanistan, Bangladesh, Bhutan, Nepal, Maldives, Myanmar, Pakistan and Sri Lanka. It is these countries – with theexception of Pakistan – that we work most closely with,” said Foreign Secretary Harsh Vardhan Shringla, while speaking about India’s neighbourhood at the Lal Bahadur Shastri National Academy of Administration on Wednesday. Development assistance in the form of concessional LOCs is extended by India under the Indian Development and Economic Assistance Scheme (IDEAS) through the Exim Bank of India.
In all, 306 LOCs worth $30.59 billion have been extended to 65 countries across the globe. The projects cover infrastructure, power generation, irrigation, healthcare and capacity building. Until now, 322 LOC projects have been completed and 277 are under implementation.
“Countries in our neighbourhood are of special significance to us. Our ties with these countries are underpinned by a shared history and culture. Policy initiatives taken by India – and its neighbours – have implications for each other,” Shringla said.
“India also realizes its prosperity and growth are linked to that of its neighbours. We cannot develop unless our neighbours develop,” he added.
