India's $1b loan offer
India yesterday offered $1 billion loans, which Bangladesh can use if it wishes to, for developing infrastructure and solar power and boosting trade with the neighbour.
India is also ready to export 500MW of electricity to Bangladesh.
The twin offers are in addition to the $1 billion line of credit and 500MW electricity that Bangladesh is already receiving from India as part of previous pledges, said Arvind Mehta, joint secretary of foreign trade (South Asia) of India's commerce department.
Mehta spoke to reporters after concluding a two-day joint-secretary level meeting at the commerce ministry in Dhaka. He led a six-member Indian delegation to the meeting.
If Bangladesh agrees to take the loan, the interest will be LIBOR (London Interbank Offered Rate) plus 2.5 percent with repayment tenure of 3-5 years, according to Mehta.
"This is not a conditional loan. Bangladesh can use it for any purpose.”
Mehta suggested areas such as renewable energy, irrigation and infrastructure where Bangladesh can use the loans.
However, an official from the Bangladesh side said the loans would be available if Indian companies win work orders to implement the projects in Bangladesh.
Mehta said they discussed the issues of infrastructure development across the bordering areas.
“We also discussed a motor vehicle agreement during the meeting for smooth transportation of cargo-laden trucks and people by road,” he said.
If the deal is signed, both Bangladeshi and Indian people will be able to enter each other's country by car through the borders, he said.
“We want to develop trades between Bangladesh and India through roads, railways and waterways,” Mehta said.
Launching a coastal shipping line between India and Bangladesh was also discussed at the meeting. “We did not discuss transit in the meeting,” Mehta said.
“The Indian side said they are ready to offer $1 billion line of credit. But we do not know the terms and conditions of the loan,” said Shahabuddin Patwary, joint secretary of the commerce ministry, who led the Bangladesh team at the meeting.
“We discussed a lot of issues, but nothing was committed. We need further discussion to take decisions,” Patwary said.