Express press service

NEW DELHI: India’s lines of credit (LOC) to its neighbors have quadrupled since 2014. From $3.27 billion in 2014, they rose to $14.7 in 2020. The bulk of loans to India’s favorable conditions in the world, nearly 50% of the country’s global envelope, goes to its neighborhood partners.

India’s largest concessional credit to any country was in Bangladesh.

“We have extended three lines of credit for $8 billion to Bangladesh, the largest concessional credit extended by India to a single country. We are also developing two Indian economic zones at Mirsarai and Mongla in Bangladesh,” said the Trade and Industry Minister Piyush Goyal during the India-Bangladesh stakeholders meeting on Tuesday.

Sri Lanka has also been dependent on loans from India. It received support totaling over $1.4 billion, of which $400 million was a currency exchange and $500 million was a loan deferral and $500 million a line of credit for fuel imports.

Another $1 billion in aid is being negotiated and is expected to be cleared when Sri Lankan Finance Minister Basil Rajapaksa visits India later this month.

The other neighboring countries that received lines of credit are Nepal ($1.65 billion), Myanmar ($476 million) and the Maldives ($1.3 billion).

“The Neighborhood First Policy, at the request of the Prime Minister, gives the highest priority to our relations with Afghanistan, Bangladesh, Bhutan, Nepal, Maldives, Myanmar, Pakistan and Sri Lanka . It is these countries, except Pakistan, with whom we work most closely,’ Foreign Secretary Harsh Vardhan Shringla said on Wednesday, speaking on India’s neighborhood at the National Academy of Administration Lal Bahadur Shastri.

Development assistance in the form of concessional LC is provided by the Government of India under the Indian Development and Economic Assistance (IDEAS) Scheme through the Exim Bank of India.
A total of 306 lines of credit worth $30.59 billion have been extended to 65 countries around the world.

The projects cover infrastructure, power generation, irrigation, healthcare and capacity building. So far, 322 LOC projects have been completed and 277 are under implementation.

“Our ties with these countries are underpinned by a common history and culture. Policy initiatives taken by India and its neighbors have implications for each other,” the foreign minister said.