The second line of credit (LoC) from India is likely to be confirmed during the Dhaka visit of Indian Prime Minister Narendra Modi, scheduled for June 6-7.
Ministry of Finance (MoF) officials said on Thursday they were expecting Indian confirmation of at least US$ 1.0 billion (100 crore) LoC during the visit of Prime Minister Modi.
"We will seek nearly $1.50 billion worth of assistance from the Indian prime minister. But we are expecting Indian confirmation of at least $1.0 billion LoC during Modi's visit," said an MoF official.
"We are taking preparation for signing a deal. If both the Prime Ministers during their bilateral talks agree on the assistance, we will ink the agreement in presence of them," said an official at the Economic Relations Division (ERD).
"We are leaving a space in the draft agreement blank for putting the exact amount of LoC. Soon after getting the indication from them, we will finalise the draft of the agreement for signing," he told the FE.
The official said India had already assured Bangladesh of providing about $ 1.0 billion under the LoC in addition to the existing one provided for development of infrastructure, especially cross-border transport facilities.
India in August 2010 confirmed the first LoC involving $ 1.0 billion for Bangladesh. It signed an agreement during the visit of the then Prime Minister Manmohan Singh in Dhaka. Later New Delhi converted $ 200 million of the $ 1.0 billion LoC into a grant in June 2012.
Under the first LoC the government of Bangladesh has undertaken about 15 development projects, mostly in the railway sector. The projects are now in different stages of implementation.
An ERD official said during the last visit of the then Indian External Affairs Secretary (Multilateral & Economic Relations) Sujata Singh, the Bangladesh side formally requested India for the second LoC.
The Indian secretary assured Bangladesh of the aid support for development of the country's infrastructure, said the official.
The MoF official also said Bangladesh needed to develop infrastructure like flyovers and railway lines, construct power plants and also invest in information and communication technology (ICT).
"If the Indian government extends its support, our infrastructure will be improved. This will also help strengthen the regional transport network with the neighbouring countries," the official added.
The MoF official said India in the LoC review meeting in February last in Dhaka for the first time had agreed to extend further financial support to Bangladesh through the 2nd LoC in a bid to help improve infrastructure.
The Indian side urged Bangladesh to undertake 10-13 fresh development projects, for which New Delhi will provide necessary financial support. India, however, did not confirm any specific amount of credit in the February meeting.
Official sources said during Modi's visit to Dhaka several deals relating to issues like the Land Boundary Agreement and bilateral trade enhancement are likely to be signed.
Experts have already termed the Modi visit very important for both the countries as it will take the future regional cooperation among the two South Asian countries to a new height.
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