How $500 million soft loans improve Indo-Bangladesh relations?

International Dec 02, 2021

Bangladesh and India are celebrating 50 years of the 1971's War that led to the liberation of Bangladesh from Pakistan, India had played a major role in the Independence struggle of Bangladesh, Mukti Bahini as a resistance against Pakistani forces and raising Armed Forces of Bangladesh.

On Monday 22nd November, as Bangladesh celebrated its 50th armed forces day, Defence Minister Rajnath Singh along with CDS Gen Bipin Rawat,  COAS Gen. MM Naravne, CNS Adm. Karamvir Singh, CAS  VR Choudhary visited Bangladesh High Commission in New Delhi as a mark of honor towards the nation.

On the occasion, India also announced a $500 million line of credit to Bangladesh for the purchase of defense equipment from India, at a low-interest rate over a long period of time. It aims to increase defense cooperation Between India and Bangladesh.

Bangladesh is a growing economy in Southeast Asia. India and Bangladesh have a trade of a staggering 10billion USD. Bangladesh plans to spend about 12-13 billion USD to modernize its armed forces to be at par with International standards by 2030.

Turkey has already signed a Memorandum of Understanding MoU with Bangladesh in June 2021 with defense exports worth 1 billion USD for exports of armored vehicles, as it aims to increase its defense export by 2023. India cannot risk losing this market to Turkey.

The soft loan will help India to tap the market in order to increase defense exports of the nation, it is also in line with the Make in India campaign of the country and India has also promised joint manufacturing of defense equipment that will not only boost the infrastructure but also provide employment to the citizens of the country.

This article has been written by Rutam Pimplapure for The Paradigm

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