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Dhaka Tribune

India not changing LoC procurement conditions

Update : 09 Nov 2015, 07:04 PM

India remains stick to its condition on procurement of goods to execute 13 projects under the fresh $2bn credit offered to Bangladesh.

At a meeting in Dhaka yesterday, they expressed their reluctance to change the condition as Bangladesh asked to take a softer stance.

Bangladesh proposed to allow procurement of 50% construction materials from Bangladesh or a third country.

But India took its earlier stance that minimum 65% of construction materials must be purchased from Indian market and that should also be of Indian origin under the proposed LoC, said an official of Economic Relations Division, who was present at the meeting.

He said India wanted to allow Bangladesh to purchase maximum 25% of goods, services or work from Bangladesh or a third country.

The construction materials include bricks, sands, cement, and steel.

Bangladesh and India were holding talks since the Indian Prime Minister Narendra Modi during his Dhaka visit offered $2bn fresh loan for Bangladesh’s infrastructure development.

Representatives from the Indian external affairs ministry, Indian High Commission officials and EXIM Bank of India participated in the talks.

A senior ERD official said although the Indian side did not fulfill our entire demands but it has assured of relaxation of some conditions for procuring goods and services on case-to-case basis for the construction related projects under its $2.0bn-aided projects.

Bangladesh’s project implementing agencies found it difficult to procure 65% of materials for the infrastructure-related projects from Indian market.

Earlier, India primarily said a minimum 75% of goods, services and works must be Indian origin and procured from the Indian market.

In response, Bangladesh proposed India that 60% of goods, services and works will be procured from India, while the remaining 40% from Bangladesh, and 50% construction materials like brick, sand and cement from India and 50% from Bangladesh.

“We have mainly discussed the procurement conditions. We have requested the lender to relax conditions for purchasing goods, services and works from Indian market, especially for the construction related projects. The Indian side assured us of consideration on case-to-case basis,” said another official.

He, however, said the Indian side at the negotiation meeting also agreed to allow Bangladeshi firms to make joint-venture with Indian firms where Indian companies will have the lead role with minimum 51% share. 

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