Sheikh Hasina's official visit: India may offer Bangladesh fresh loans under new framework

The implementation of the projects under the existing loan programme is proving difficult due to some strict loan conditions, hence a new framework.
PM Modi and Sheikh Hasina.
PM Modi and Sheikh Hasina.(File Photo)

India may offer Bangladesh fresh loans under a new framework. The issue will be discussed during the country's Prime Minister Sheikh Hasina's official visit to India next week, The Daily Star reported quoting a top finance ministry official.

The implementation of the projects under the existing loan programme is proving difficult due to some strict loan conditions, hence a new framework.

Although, signing of any new loan agreement is unlikely during Hasina's visit, an announcement to this effect may come in a joint communique, the official added requesting anonymity citing diplomatic confidentiality.

Indian Prime Minister Narendra Modi and Hasina will have a one-on-one meeting followed by delegation-level talks on June 22 at the Hyderabad House, a state guest house, in New Delhi.

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Over the last few months, Dhaka and New Delhi have been discussing a new loan framework and its amount and conditionalities, the report said.

Since 2010, according to The Daily Star, India committed $7.36 billion in loan to Bangladesh. Of this, Bangladesh has been able to utilise only $1.73 billion, or 23 percent of the commitment, till April this year.

The conditions of the existing Indian Line of Credit (LoC) are very strict. For example, around 65-75 percent of goods or services for each project must be procured from India, causing delay in project implementation, according to officials.

Appointment of Indian contractors along with bureaucratic red-tape on both sides also limits the project's progress, the report noted.

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