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Dhaka Tribune

Delhi offers Dhaka another $1bn credit

Update : 13 Mar 2014, 08:44 PM

India has offered an additional $1 billion credit to Bangladesh for the development of trade facilities and infrastructure.

Shri Arvind Mehta, joint secretary of India’s Department of Commerce, placed the proposal at the ninth meeting of the Joint Working Group on trade at the commerce ministry yesterday. Joint Secretary of Bangladesh commerce ministry M Shahabuddin Patwary led the Bangladesh side at the two-day-long meeting.

After the meeting, which discussed 16 trade issues of India and eight of Bangladesh, Mehta told reporters that the Indian commerce ministry would be the guarantor of the Indian Exim Bank, which would disburse the loan at a libor rate plus 2.5%-3% interest.

The credit would be the same as the previous credit facility provided to Bangladesh, he said.

“Sri Lanka has already taken $800 million credit under the [Indian] commerce ministry scheme to develop its agriculture and solar power,” he said.

Mehta further said Bangladesh needed a big capital and Bangladesh could use the fund anywhere as the government liked.

Dhaka and New Delhi had signed a $1bn loan deal with the Indian EXIM Bank in August 2010. Bangladesh had proposed undertaking 20 projects with the credit.

Bangladesh government is now spending $800 million in 13 projects and the remaining $200mwas used to support the 2013-14 budget as a grant.

Mehta said India had also decided to supply 500MW electricity to Bangladesh in addition to the 500MW being added to the national grid every day now. He pointed out that Bangladesh only needed to develop its infrastructure to take the 1,000MW electricity from India.

The Indian joint secretary said the Joint Working Group meeting had also discussed starting a container train service, coastal shipping and motor vehicle agreement. The issues should be addressed immediately to provide facilities to the common people of the two neighbouring countries. The motor vehicle agreement would especially facilitate Bangladeshi patients willing to go to India for treatment.

He claimed that three to four million people went to India every day through the Petrapol land port.

“We have already taken huge development projects on Indian land ports, including Petrapol, so the Benapole link road also has to be developed,” Mehta said.

On the transit issue, he said transit would benefit the two countries. Bangladesh Joint Secretary Shahabuddin Patwary said in the initial statement the Indian joint secretary had mentioned the additional $1bn credit line. “But how we will utilise the fund is not clear in the statement. We had not discussed the credit line at the meeting and the ministry was not also informed about it,” he said.

He said the issue of additional 500MW electricity was also not clear in the Indian statement.

Shahabuddin said the motor vehicle agreement was a matter of the communication, shipping and foreign ministries as the transit issue was involved.

The meeting discussed issues of duty paid against exported Bangladesh garment products and recognition of certificates given by the Bangladesh Standards and Testing Institution in India, he said.

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