Bangladesh’s largest recipient of India’s infrastructure project exports: EXIM Bank

EXIM Bank is the leading lending institution advancing India’s infrastructure diplomacy in the South Asia region and globally. Established by the Government of India under the Export-Import Bank of India Act 1981 as a specialized export credit agency, the bank provides lines of credit or LOCs to foreign financial institutions, sovereign governments and other entities for development and infrastructure projects. Equipment, goods and services from India on deferred credit terms.

EXIM Bank’s policy business, conducted on behalf of the Government of India, facilitating project exports and supporting development priorities in over 60 countries, accounts for 52% of its loan portfolio.

Net Lending Assets stood at Rs. 1,34,523 crore at the end of March.

According to N. Ramesh, Deputy Managing Director of EXIM Bank of India, of all neighboring countries, Bangladesh has emerged as the most important partner with which to expand India’s involvement in infrastructure development, both in terms of financing and the type of projects.

“Bangladesh is the most exposed among South Asian countries. We have around $7.9 billion (LOCs) today,” Ramesh said.

In recent years, the focus has been on power generation and power transmission lines, as well as the development of a nuclear power plant, which also involves Russian companies, Ramesh said.

“The biggest project we have supported is in Bangladesh, namely the power plant, a joint venture of the Bangladesh Power Generation Company and NTPC. We are considering building huge capacity or generating capacity in Bangladesh and the funding will come from India,” Ramesh said.

The eastern neighbor is very important from a connectivity and strategic point of view as India also helps with railway and port infrastructure.

The country’s ports allow for much shorter access to the north-eastern states of India and EXIM Bank has focused on financing the modernization and development of key ports and their rail links.

“There are very important railway lines there, which are vital given Bangladesh’s high density and greater need for hinterland transport from the port to the cities. We play a big role there,” he said.

“These (railway) projects mostly cover Dhaka and the port cities. But they are also very important strategically in the sense that they either connect to Agartala or to the rest of mainland India so connectivity is established and seamless,” Ramesh said.

Indian companies will carry out the modernization of Mongla Port in Bangladesh, the neighboring country’s second busiest port, funded by LOC expanded by EXIM Bank.

“The most important aspect is that there are at least three to four ports that are either being decongested or expanded or a new facility is being built, say a container depot, an inland export zone or an Indian economic zone. The port economy in Bangladesh is getting a boost on several fronts,” he added.


Infrastructure development in the Maldives remains a priority for the Indian government due to the island nation’s location in the Indian Ocean region and location on major shipping routes. A decade earlier, however, Indian private airport developer GMR Group had a bitter experience when its contract to develop Ibrahim Nasir International Airport near the capital Male was terminated.

GMR had called the cancellation “illegitimate” and the incident left a bitter mark on India’s infrastructure development on the island.

However, Ramesh emphasized that the current infrastructure development of Indian companies is on a solid footing in projects supported in particular by EXIM Bank’s LOCs.

“At least on line-of-credit programs, it’s going to be very safe. I think the GMR (group) was on their own.

The Indian government remains very steadfast in these specific projects. Of course we need support on the ground and unless the host country is willing to allow the Indian EPC (Engineering, Procurement, Construction) companies to do the work, we may not be able to push much of it forward, but the money is secured,” said Ramesh.

Notwithstanding the changing political situation in the island nation, which has alternated between pro and anti-India decisions over the years, India remains committed to its investments with current spending of around US$1.4 billion on LOCs for projects involving airport , port development and connectivity projects include Steadfast among others.

“There is a land reclamation project on Hanimaadhoo Island as well as the international airport. There is another airport (project) in Gan (Maldives island). The island connectivity, we’re calling it a Greater Male Connectivity Project, that’s quite a bigger project too,” Ramesh said.

For Nepal, the expanded LOCs total US$1.6 billion and the focus is on road development and transmission lines.

“(In)Nepal much of the road improvement work is being supported by EXIM Bank through the Indian Government credit line for major sections of the road network. A (road) network over 500 kilometers long is currently being built in Nepal,” said Ramesh.

“A large part of it (LOCs) goes into the expansion of the road network and also into the transmission grids. Since there are numerous hydroelectric power projects in Nepal, there is a need to transport the electricity generated. So we also support this particular segment to a large extent,” he added.

For Sri Lanka, it is currently on a wait-and-see approach for EXIM Bank, which has approximately $2.7 billion worth of exposure to LOCs. The southern neighbor has experienced a severe economic downturn in recent years due to dwindling foreign exchange reserves resulting from inappropriate economic and political decisions by the country’s previous Gotabaya Rajapaksa government.

Existing projects include transportation networks, railways and roads, and water treatment and distribution projects.

“It’s a neighboring country, strategically important, you can’t be very firm in your point of view either.

The Indian government has been very cooperative with Sri Lanka. Even after the debt moratorium, $500 million (credit line) was allocated for petroleum products and another $50 million for fertilizers. We’ve been very patient with the money,” Ramesh said.

As its southern neighbor undergoes an International Monetary Fund-led debt restructuring process as part of its economic recovery, EXIM Bank will be monitoring developments closely to ensure India’s economic interests in Sri Lanka are safeguarded.

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