India has offered a new line of credit (LoC) for $5 billion, its biggest yet in the neighbourhood, to Bangladesh. The $5 billion is an open LoC; we can use it to enhance the level of trade, movement, connectivity. The projects are yet to be fully identified, and there is no time line. Bangladesh can spend it all at once, or as it needs. The Indian side has an interest is in connectivity: railway projects, road transportation, road maintenance.
Expected Agreements on account of Line of credit
1. LoC may be used for reconstruction of a seventh India-Bangladesh railway line between Agartala and Akhaura, a Rs. 1,000-crore project, for which Railway Minister Suresh Prabhu laid the foundation stone in August 2016.
Significance for India
The 15-km line from Bangladesh to Tripura is significant as it is part of India’s larger strategy of assisting Bangladesh’s infrastructure while using it to transit to the “north-eastern” States.
2. Ferry services
Ferry services connecting Assam, Bangladesh and West Bengal and permissions for running cruise liners between the two countries, along with several road projects, are expected.
3. The next part of the plan is to link Bangladesh to other neighbourhood countries. While the plan under the Bangladesh-Bhutan-India-Nepal initiative has hit a roadblock over the Bhutanese Parliament’s refusal to ratify the network, officials are understood to be working around it, to link Bangladesh, India and Nepal.