India offered Monday a fresh line of credit (LoC) worth US$ 1.0 billion to Bangladesh, notwithstanding the patchy record of project implementation under the past credit line of equivalent amount.
Indian secretary of external affairs ministry (Multilateral and Economic Relations) Sujata Mehta, now in the city, made the new offer to Bangladesh during a meeting with Finance Minister Abul Maal Abdul Muhith at his secretariat office.
"The new line of credit will be spent on implementing various development projects in health and education," the finance minister told reporters after his meeting with the Indian secretary.
The pledge comes at a time when the development projects funded under the Indian-funded $1.0 billion loan progresses at a slower-than-expected pace.
Muhith said the Indian secretary expressed her government's interest in providing fresh loans to Bangladesh and wanted to know the sectors for which Bangladesh is interested to spend the money.
"India shows its interest in transports and infrastructure, but I asked them to get out of transport sector and invest in education and health as we are now concentrating more on human resource development," said the minister.
During former Indian prime minister Manmohan Singh's tenure, India extended a US$ 1.0 billion credit line to Bangladesh in August 2010 for developing infrastructure projects, mostly in the communications sector. India later converted US$ 200 million out of the US$ 1.0 billion credit line as grant assistance in June 2012, enabling Bangladesh to utilise it for any priority project.
Although over four years have elapsed since the signing of the loan agreement with India for implementing various development projects in Bangladesh, only seven out of 15 projects have been completed, with two more projects nearing completion, said officials. Bangladesh has reportedly received only $173.58 million out of the $800 million of the first LoC.
"We have discussed various bilateral issues including trade, business, investment and mutual cooperation," said the finance minister. He said the issue of cross-border traffic, especially after renewal of Indo-Bangla bilateral trade agreement with the provision for transporting goods from Bangladesh to Nepal and Bhutan, were also discussed in the meeting. The minister, however, said that detailed discussions in most of the issues will be held with officials of the Economic Relations Divisions.
Mehta arrived in Dhaka on Sunday on a three-day visit to review and discuss the ongoing India-Bangladesh development partnership and economic cooperation.
She will review and discuss the ongoing development partnership and economic cooperation, as well as ways to strengthen and deepen it further during her three-day visit, according to Indian High Commission in Dhaka.
The Secretary is accompanied by Joint Secretary (Development Partnership Administration) Alok Kumar Sinha and Joint Secretary (Bangladesh and Myanmar) Sripriya Ranganathan.
Later, during a meeting with the high officials of Bangladesh Economic Relations Division (ERD) on the day, the Indian delegation agreed to provide US$ 68 million (6.8 crore) in addition to its current $800 million line of credit (LoC) for implementing Bangladesh's 15 ongoing development projects.
"For all the ongoing projects, $68 million additional funds will be required. We had requested the Indian delegation. It had assured us of providing the additional funds along with the $800 million LoC. Now the total LoC will stand at $868 million," ERD additional secretary Asif-Uz-Zaman told reporters after the meeting.
The Indian delegation, led by its External Affairs Secretary (Multilateral & Economic Relations) Sujata Mehta, met the ERD secretary Mohammad Mejbahuddin and other ERD officials.
New Delhi in 2010 offered $1.0 billion LoC for Bangladesh's infrastructure development. Later in 2013 it offered $200 million out of the LoC in the form of grant.
Under the financial support, the government had undertaken 15 development projects which are now in different stages of implementation.
Both the sides at the ERD secretary's office discussed the progress in implementation of the ongoing projects under the current $800 million LoC, the proposed 2nd LoC for Bangladesh's infrastructure development and the overall economic cooperation.
"The Indian side has not said anything concrete on the proposed 2nd LoC. But they have assured us that finalisation of the financial assistance will take place during the next visit of Indian Prime Minister Narendra Modi," Mr Zaman said.
Ms Mehta, however, declined to say anything to the press after the meeting with the ERD.
When asked, Indian High Commissioner in Bangladesh Pankaj Saran said they would formally make public the Indian version through a media release. But the release was not available to the media until filing this report at 8:0pm Monday.
About the ongoing projects under the current $800 million LoC, Mr Asif-Uz-Zaman said the Indian side was happy over the progress in implementing the ongoing 15 projects.
Mr Zaman told the FE that India at the last LoC review meeting in February this year in Dhaka had agreed to extend its further financial support to Bangladesh through the 2nd LoC in a bid to help improve Bangladesh's infrastructure.
The Indian side agreed further that Delhi would provide necessary financial support for some fresh development projects of Dhaka, he added.
"So, we are hopeful that the next LoC will be finalised during the upcoming visit of Mr Modi," Mr Zaman said.
Ms Mehta also met Finance Minister AMA Muhith on Monday morning.
The Indian External Affairs Secretary leading the delegation arrived here on April 5. She is scheduled to fly back home today (Tuesday).
mzrbd@yahoo.com and kabirhumayan10@gmail.com
© 2026 - All Rights with The Financial Express
