India offered Bangladesh Thursday a fresh US $ 1.0 billion line of credit for infrastructure development, a high Indian official said.
The neighbouring country also offered to supply another 500 megawatts (MW) of power to Bangladesh on completion of required infrastructure development. India is now supplying 500 megawatts of power to Bangladesh.
The Indian proposals came at the 9th Bangladesh-India Joint Working Group on Trade meeting that ended Thursday. The meeting started on March 12.
"We offered Bangladesh a fresh US $ 1.0 billion line of credit for infrastructure development at the LIBOR (London Interbank Offered Rate) plus 2.50 per cent interest rate," Arvind Mehta, joint secretary of the Indian Ministries of Commerce and Industries, told media after the meeting in the conference room of the ministry of commerce (MoC) at Bangladesh Secretariat.
He said the Indian Commerce Ministry had taken an initiative to provide loans to its neighbouring countries for infrastructure development projects.
"The Indian Commerce Ministry has such a fund for development purposes of its neigbours which will be provided by the Exim Bank of India," he said.
He also said that Bangladesh would decide on how they would spend the money.
About the offer of power supply he said the Indian Power Ministry would finalise the issue.
Mr Mehta said that a motor vehicles agreement between the two countries could help reduce the trade cost.
He said if there was such an agreement, then vehicles carrying visitors and trucks and lorries carrying goods could enter their respective destinations either in Bangladesh or in India.
"If there is a motor vehicle agreement, it will reduce the trade cost and give great relief to the visitors," he said.
"We had a fruitful discussion on different trade issues," Mr Shahabuddin Patwary, joint secretary of the ministry of commerce, who led the Bangladesh side in the meeting, told the media. Earlier on August 7, 2010 India and Bangladesh signed the previous US $ 1.0 billion credit agreement in Dhaka. Under the deal on the Indian credit, 14 infrastructure development projects are now being implemented at a cost of over US $ 700 million. They include mainly road and railway projects.
In the meeting, the Bangladeshi and Indian officials discussed ways to boost trade between the two countries by removing tariff and non-tariff barriers, Bangladesh-India Container Train Service, finalisation of agreement and protocol for resuming coastal shipping services, developing Benapole-Petrapole and other landports and finalisation of a cooperation agreement between BSTI (Bangladesh Standards and Testing Institution) and the BIS (Bureau of Indian Standards).
It also discussed the acceptance of BSTI certificates by the Indian authority, withdrawal of countervailing duty (CVD) on Bangladeshi ready- made garment, building a bridge over the river Feni and relaxation of export restriction on Bangladeshi essential commodities' access to Indian markets.
In November 2011, India announced duty and quota-free market access for all Bangladeshi products, except 25 alcoholic and drug items.
The volume of trade between the two countries was $ 5.34 billion in the fiscal year (FY) 2012-13. Bangladesh's exports to India were $ 563 million for the FY 2012-13, leaving Bangladesh's trade deficit at $ 4.2 billion.
