Wednesday, May 23, 2012

Indian PM to relax terms on $500 million line of credit: reports

Wednesday, 23 May 2012 13:02 Mizzima News

Indian Prime Minister Manmohan Singh, who will arrive in Burma later this month, will bring a package of proposals to accelerate “development and connectivity” that include relaxing terms on a $500-million line of credit, launching an Imphal-Mandalay bus service and opening local branches of Indian banks.

His visit is being touted by the Indian press as a key moment in India-Burma relations, with India being the most powerful democracy in South Asia and eager to develop closer relations through its “Look East” policy.

Indian Prime Minister Manmohan Singh, left, stands as Burma's President Thein Sein, second from left, shakes hands with Indian President Prathibha Patil flanked by Burma's first lady Khin Khin Win during a state welcome at the Presidential Palace in New Delhi in October 2011. Photo: AFP

Singh’s visit will be the first since Indian PM Rajiv Gandhi visited Burma in 1987.

He is expected to ease a line of credit terms by extending the repayment period, lowering management and commitment fees and reducing the requirement of the Indian component to 40 per cent in proposed hydropower projects, said the Indian Express newspaper.

The “connectivity package” consists of the establishment of the Imphal-Mandalay bus service through the border town of Moreh; an increase in flights from the current twice weekly schedule and assistance in development of Myanmar Railways “in areas bordering India” by 2016.

Other proposals include: a third border trade post at Avakhung-Pansat/Somrai; commitment by India to build the Tamanthi and Shwezaye hydropower projects; an upgrade to the Rhi-Tiddim, Tamu-Kalewa-Kalmvo roads and 76 bridges; and the opening of representative branches by Union Bank of India and Bank of India to promote trade in local currency, in addition to an offer to help train banking officials, the newspaper reported.

Burmese President Thein Sein visited India in October 2011. India and Burma agreed to double bilateral trade to US$ 3 billion by 2015.

India has invested in Burmese sectors including medicine, railroads, oil and natural gas, mining and hydropower. The current value of the existing bilateral trade is about US$ 1.5 billion.

The two countries expect that the construction of the Kaladan Multimodal Transit Transport Project will be completed in 2013 at a cost of more than US$ 120 million.

Media reports have noted the competition between India and China to gain economic interests in Burma.

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