India’s soft loans to neighbours up to $15 billion: Shringla

Act East policy extended to South Asian countries as development and growth are interlinked, the G-20 chief coordinator said at an Army-organised event

November 20, 2022 10:08 pm | Updated 10:08 pm IST - GUWAHATI

Foreign Secretary Harsh Vardhan Shringla. File

Foreign Secretary Harsh Vardhan Shringla. File | Photo Credit: PTI

The volume of India’s soft loans to neighbouring countries has increased from about $3 billion to almost $15 billion in the last eight years, former foreign secretary and G-20 chief coordinator Harsh Vardhan Shringla said.

Speaking at the Purvottar Swabhiman Utsav organised by the Army’s Eastern Command in Guwahati on Sunday, he said the Asian Development Bank had once marked South Asia as the least integrated region on earth.

In order to change the perception, India replaced the Look East policy with the Act East policy to incorporate neighbouring countries such as Bangladesh, Myanmar and Nepal in the plan to develop infrastructure and connectivity, Mr. Shringla said.

“As part of this policy, there is an ambition to upgrade the infrastructure, rail, telecom, power and waterways to strengthen our economic, technological, political and security ties with South East Asia, the fastest-growing region in the world beyond the northeast,” the diplomat said.

He said India has significantly ungraded investment in terms of outreach to the neighbours and beyond to the east of the country. This, he added, has been in keeping with Prime Minister Narendra Modi’s view of developing the northeast as a gateway to South East Asia.

“One important statistic in this regard is that our lines of credit extended to our immediate neighbourhood has increased from $3 billion in 2014 to close to $15 billion today. We are providing soft loans to our neighbours to develop infrastructure for improved connectivity with us,” Mr. Shringla said.

“We do this because, by connecting the region, we can bring in development and benefits to our own country in general, and the northeast in particular,” he said.

Mr. Shringla said India is poised to become a $5 trillion economy by 2030. “We are the fastest-growing large economy in the world. From that point of view, we have to make sure that our neighbours grow with us. Otherwise, you will have issues which will hamper your own development and growth,” he said.

The soft loans have yielded results, Mr. Shringla said.

“Our trade with our neighbours has increased by almost 50% in the last few years. Today, Bangladesh is our fifth-largest trading partner and Nepal is emerging as our tenth-largest,” he said.

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