India today said it would provide $100 million as loan for each of its neighbouring countries to help them develop infrastructure like roads and power.
After a meeting of the South Asia Free Trade Area Ministerial Council at Male (Maldives), Commerce and Industry Minister Anand Sharma said India has evolved a new ‘Buyer Credit Cover’ for the SAARC region, that is, a development loan for them.
“We would be happy to extend such development loan through our Exim bank, interest rates close to LIBOR (London Inter Bank Offer Rate),” he said.
Sharma also said that as energy needs of South Asian Association For Regional Cooperation (SAARC) region is multiplying, there is a need to build greater energy security through trans-national electricity grids.
“The SAARC region needs to concentrate on all possibilities of cross-border electricity trade. This would help in better energy load management as well as energy security in South Asia,” he said.
As regard the Free trade agreement, Sharma urged all the member countries to “bring down all the protectionist trade barriers to achieve regional economies of scale at a greater pace.” He emphasised that the countries in South Asia need to rapidly break down barriers in key sectors like textiles, pharmaceuticals, infrastructure, electronic goods, automobiles and agriculture. He asked SAARC negotiators to complete talks for opening up trade in services through a separate agreement.
“The focus should also be to bring down the tariff levels for those items which still remain within the sensitive list,” he said.
He added that foreign direct investment (FDI) and trade within the SAARC region has been much below the potential and it should be enhanced further.