Thursday, December 2, 2021

Indian Synergises Business With Foreign Policy

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The Narendra Modi led National Democratic Alliance government (NDA), has focussed on B2B (Business to business) partnerships in its foreign policy. Noteworthy among them has been the extension of Lines of Credit (LoC) by India to partner countries with soft rates of interest. Numbering in the hundreds, they have grown in scale, complexity and coverage over the last few years. Their intent ranges from executing projects abroad to extending services and supplying products. External Affairs Minister Dr. S Jaishankar highlighted India’s business-like diplomatic approach at a business summit.

The common thread among the LoCs is that 65 % to 75 % of any Line of Credit has an India content. Each, in their own way, provides market access abroad for our companies. Since Lines of Credit have sovereign guarantee, it helps Indian companies to operate in markets which they would normally not venture into since they are risk prone.

Till now, India has offered 300 Lines of Credit to 64 countries involving 539 projects. These initiatives have been qualitatively expanded in recent years, especially in terms of the size of the LoCs and the profile of the projects. Their planning and execution has also become more efficient by a more integrated whole–of-the-Government approach and stronger oversight, one that goes all the way up to the Prime Minister. As a result, in the last few years, projects are getting completed at the rate of more than 2 large ones a month. When it comes to High-Impact Development Projects, that make an impact at the grass-root level in our neighbourhood, India is completing 4 projects a week. This is no mean achievement.

The bulk of the LoCs and projects are with Africa, given the huge focus the Government has given to India’s development partnership with that continent. This includes 321 projects involving 205 LoCs. There are 181 projects also in Asia, 32 in Latin America and Caribbean and 3 each in Central Asia and Oceania. The dispersal of grant assistance is even broader than the Lines of Credit, ranging from the Caribbean to the Pacific Islands. Today, these development partnerships are helping to make India’s diplomatic footprint more global, said Dr. Jaishankar.

Development partnerships are most salient in our relationship with Bhutan, where it has a long and successful history in the power sector. Other iconic projects in our neighbourhood under the LoCs include key rail bridges in Bangladesh, reconstruction of railway tracks in Sri Lanka, road projects and power transmission lines in Nepal, and the Metro Express in Mauritius.

The External Affairs Minister observed, in Africa, the prominent LoC projects cover the power sector in Sudan, Rwanda, Zimbabwe and Malawi; water in Mozambique, Tanzania and Guinea, health in Cote d’Ivoire, Guinea and Zambia, sugar plants in Ethiopia and Ghana, cement in Djibouti and Republic of Congo and Government buildings in the Gambia and Burundi. In fact, in several African countries, some of the manufacturing plants Indian companies have set up are truly the first of its kind and pioneering in nature. Cumulatively, they are a testimony to our economic capabilities and national branding. In that sense, they become a foundation for Indian companies broadly to engage in more aggressive business development in those particular geographies. It is significant that as a result, even in the last 5 years, we have extended US$ 1 billion in Buyers Credit to African countries.

In addition to the Lines of Credit, New Delhi has also provided grants on occasion to countries for projects undertaken by India. Not surprisingly, the bulk of the grant projects are in our immediate neighbourhood-272, if Mauritius and Seychelles are also included.

Dr. Jaishankar said, the iconic grant projects include the Afghan Parliament and the Salma Dam, the housing projects for Tamils in Sri Lanka, the Kaladan transport project in Myanmar, the Supreme Court in Mauritius, and the Biratnagar integrated check-post with Nepal. Brand India has many facets for the world, and Business India is one of its most important.


Script: Kaushik Roy, Air: News Analyst

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