Bangladesh and India have agreed to resolve problems surrounding projects financed under India’s line of credit (LoC) assistance, following talks between Indian High Commissioner Pranay Verma and Bangladesh Finance Minister Amir Khosru Mahmud Chowdhury in Dhaka yesterday.
Speaking to reporters after the meeting, Khosru said they also discussed the progress of LoC-supported projects. “Hopefully, the projects will see further progress in the coming days.”
Verma described the meeting as “very positive and productive”, saying discussions focused on strengthening financial sector cooperation, expanding economic relations and other issues of mutual interest between the two countries.
Both countries remain satisfied with the progress of the ongoing projects, he said.
“Some initial challenges have emerged in a few large projects, but efforts are being made to resolve them,” he said.
The talks come against the backdrop of sluggish disbursement under the three LoC agreements signed since 2010.
Of a total commitment spanning 42 projects, only $1.88 billion was disbursed by June 2024 against cumulative LoC deals worth over $7 billion, while Bangladesh repaid $254 million.
The first LoC, worth $862 million for 15 projects, was signed in 2010. The second, worth $2 billion for 12 projects, was signed in March 2016. The third credit deal, amounting to $4.5 billion, was signed for 15 projects in October 2017.
Just 14 of the 42 projects have been completed, at a cost of roughly $410 million, or about 6 percent of the overall commitment under the first two credit lines.
Beyond the LoC, the two sides discussed a broader range of bilateral issues, including trade, customs, financial sector cooperation and digital infrastructure.
Verma said Bangladesh’s priorities in the financial sector were discussed during the meeting, including improving the ease of doing business, tax reforms and expanding the use of technology to ensure broader participation in economic activities.
The Indian envoy said he briefed the finance minister on India’s experience expanding financial inclusion through its digital public infrastructure.
The two sides also discussed development projects being implemented jointly by the two countries.
On trade, the Indian high commissioner said both sides emphasised the need to further strengthen bilateral trade and economic ties.
Discussions also focused on making existing connectivity through sea, land and air routes more efficient to facilitate trade and business activities.
“If various processes can be simplified as part of ease of doing business, cooperation between businesses of the two countries will increase,” Verma said.
He added that this would help boost bilateral trade as well as increase Bangladesh’s exports to the Indian market.
The meeting also discussed ways to integrate the two economies more closely at both bilateral and regional levels, he said.
Verma said constructive discussions would take place in the future regarding the potential use of ports between the two countries.
He added that stronger bilateral relations could be built in the future based on shared development priorities, new ideas, technology and people-centric cooperation.