Lines of Credit: Policy Matrix Revisited


Development cooperation is an integral part of India’s foreign policy and India has been extending cooperation to its fellow developing countries since even before its independence in 1947. In present times, India’s development coop- eration is manifested through its ‘development compact’ comprising five com- ponents, namely capacity building and skill transfer, technology and related partnerships, development finance (which includes concessional loans and lines of credit [LOCs]), grants, and trade and investment. Of late, Indian extension of LoCs through the EXIM Bank of India has also become a prominent modality of development cooperation. However, in many a cases it has been seen that the projects faced a number of challenges for effective delivery. This article explores these challenges and other issues related to quality and timely delivery of the projects. It also explains the evolution of the scheme IDEAS and discusses new guidelines by the Government of India.

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