Cabinet Approves Deal Between India And South Korea For $9 Billion Export Credit
The Union Cabinet on Wednesday (June 7) has approved the proposed Memorandum of Understanding (MoU) with South Korea for export credit of USD 9 billion for infrastructural development in India.
The agreement is proposed to be signed between the Export- Import Bank of India (EXIM Bank) and Export-Import Bank of Korea (KEXIM) during the forthcoming visit of Finance Minister Arun Jaitley to Korea during 14-15 June, 2017 for the Annual Financial Bilateral Dialogue, an official statement said. The decision is expected to promote the country’s international exports, and deepen political and financial ties between India and South Korea.
The export credit will be utilized through lending by EXIM Bank for promoting projects for priority sectors, including smart cities, railways, power generation and transmission etc., in India and for the supply of goods and services from India and Korea as part of projects in third countries.
The parties to the MoU will hold mutual consultations to structure the financial assistance, review the existing arrangements and related procedures.
EXIM Bank will identify viable projects in India. For projects in third countries, both parties will jointly identify viable projects. The statement said it is understood from EXIM Bank that the USD 9 billion would be extended by KEXIM by way of Investment Credit to finance projects with a certain level of Korean import content and interest rates as per export credit guidelines. This amount may also be utilized by KEXIM as the financier without the participation of EXIM Bank subject to satisfaction of the purpose.
The supply of goods and services from India and South Korea as part of projects in third countries will be an additional avenue which this MoU will enable. It will help in exchanging mutual experience, sharing information on financing export and import operations, project assessment and knowledge generated in respective fields of activities.
