The Union Cabinet on Wednesday approved a scheme that will enable the Export Import Bank of India and other state-run banks to make available concessional finance to Indian firms that bid for strategically important large construction and infrastructure projects abroad.
Though the exact quantum of interest relief would be decided by an empowered committee, which will also select the eligible projects on a case-by-base basis, the Modi government’s move is expected to augment the Exim Bank’s capacity. Its resources, it is felt, need to be stepped up to compete with stronger Chinese counterparts.
“The repayment of the loan would be guaranteed by the foreign government (which puts out the bids for the projects). The strategic importance of a project, to deserve financing under this scheme, will be decided, on a case by case basis, by a committee chaired by Economic Affairs Secretary,” an official statement said. FE