Policy Briefs & Reports

India-Bangladesh Development Partnership: Extension of a US $4.5 Billion by India Towards its Eastern Neighbour

Rani Mullen, Kashyap Arora

Centre for Policy Research & Indian Development Cooperation Research

October 25, 2017

Bangladesh as one of India’s immediate neighbour holds strategic and economic importance for India. A strong India-Bangladesh relationship is important to promote regional stability, enhance India’s connectivity with East Asia and bring economic benefits to India’s landlocked Northeastern region. Diligent efforts of successive Indian governments have strengthened India’s bilateral ties with its eastern neighbour. Moreover, an important instrument used by India to assist Bangladesh’s development are its concessional credit lines, with the most recent example of this being a USD 4.5 billion line of credit (LOC) agreement signed on 4th October. In light of these facts, this brief highlights in detail multiple LOCs extended by India towards Bangladesh, shedding light on their objectives (economic and strategic), implementation record, as well as shortcomings.