Ministry of External Affairs Current Affairs

Cabinet approves Extension of Concessional Financing Scheme

Union Cabinet has approved first extension of Concessional Financing Scheme (CFS) for another five years from 2018 to 2023 to support Indian Entities bidding for strategically important infrastructure projects abroad. The scheme also has been liberalized, allowing any Indian company, irrespective of ownership eligible to benefits of it.

Implementation

Under CFS, Ministry of External Affairs (MEA) selects specific projects keeping in view strategic interest of India and sends same to Department of Economic Affairs (DEA). The strategic importance of project to deserve financing is decided on case to case basis, by Committee chaired by Secretary, DEA and with members from Department of Expenditure and Department of Financial Services, Ministry of Finance; MEA; Department of Industrial Promotion and Policy (DIPP), Ministry of Commerce and Ministry of Home Affairs. Deputy National Security Adviser (Dy NSA) is also a member of this Committee. Once project is approved by Committee, DEA issues formal letter to Export-Import (EXIM) Bank conveying approval for financing of project.

The Scheme is presently being operated through EXIM Bank, which raises resources from market to provide concessional finance. Union Government provides counter guarantee and interest equalization support of 2% to EXIM Bank to offer concessional finance to any foreign Government or its owned or controlled entity, if any Indian entity, succeeds in getting contract for execution of project. EXIM Bank can extend credit at rate not exceeding LIBOR (avg. of six months) + 100 bps. The repayment of loan is guaranteed by foreign government.

Background

Prior to introduction of CFS, Indian entities were not able to bid for large projects abroad since cost of financing was very high for them and bidders from other countries such as China, Japan, Europe and US were able to provide credit at superior terms (i.e. lower interest rate and longer tenures giving advantage to bidders from those countries). Union Government is executing CFS since 2015-16 to support Indian entities bidding for strategically important infrastructure projects abroad. CFS has enabled India to generate substantial backward linkage induced jobs, demand for material and machinery in India and also created lot of goodwill for India.

Month: Categories: India Current Affairs 2018

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10th edition of Delhi Dialogue held in New Delhi

The 10th edition of Delhi Dialogue (DD X) was held in New Delhi and was hosted by Union External Affairs Minister Sushma Swaraj. The theme for this edition was “Strengthening India-ASEAN Maritime Cooperation”. This was the first major event organised after ASEAN-India Commemorative Summit, which was held in New Delhi in January 2018.

Key Facts

DD X was organised by Ministry of External Affairs (MEA) in partnership with the Research and Information System for Developing Countries (RIS). It saw participation of political leadership, policy makers, senior officials, diplomats, business leaders, think-tanks and academicians from India and ASEAN member states. Chief ministers from North-Eastern states were also invited to participate in the event. DD X comprised of six plenary and four parallel sessions, with each session followed by open discussions.

Delhi Dialogue

Delhi Dialogue is premier annual event to discuss politico-security, economic and socio-cultural engagement between India and the Association of Southeast Asian Nations (ASEAN). It has been held annually since 2009 and political leaders, policy makers, senior officials, diplomats, think tanks and academicians from both sides participate in the discussions pertaining to ASEAN-India relations. It is aimed at finding a common ground and expanding the scope of cooperation between India and ASEAN nations. The theme of ninth edition of dialogue was “ASEAN-India Relations: Charting the Course for the Next 25 Years”. It had marked the 25th anniversary of ASEAN-India Partnership.

Month: Categories: India Current Affairs 2018

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