PM Modi's Russia Visit: India Extends $1 Billion Line Of Credit To Far East
India has decided to extend one billion dollar line of credit to Russia for the Far East infrastructure that will smoothen the Asia-Pacific trade of oil, petroleum and other natural resources.
The line of credit is a loan agreement between a financial institution and a customer wherein an amount not exceeding the maximum set credit limit in the agreement can be taken at any time according to the requirement of the borrower.
The investment decision was taken during the two-day visit of Prime Minister Narendra Modi and Russian President Vladimir Putin in Vladivostok, Russia during the East Economic Forum(EEF) Summit on Wednesday, September 4. PM Modi is the first-ever Indian Prime Minister to visit the Russian Far East Region.
Thank you Russia! This has been a productive visit.
The outcomes of this visit will bring Russia and India closer. Gratitude to President Putin, the Government and people of Russia for their hospitality. pic.twitter.com/gFpKXqBaHc
— Narendra Modi (@narendramodi) September 5, 2019
The PM said, “India’s connection to Russia’s the Far East goes back a long way. India was the first country to open a consulate in Vladivostok.”
“I am confident that this step will give new impetus to the development of economic diplomacy and the growth of ties between the regions of our friendly states. We will remain active partners in our priority cooperation,” PM Modi further added.
Ahead of the PM’s trip, commerce and industry minister Piyush Goyal led a delegation of four BJP chief ministers and 140 businessmen last month to the Russian Far East in a bid to stamp India’s presence in a region currently dominated by China.
India and Russia have also decided to lay down a faster sea-link route between the Far East capital, Vladivostok, and Chennai that will help to deliver the goods within 24 days which currently takes 42 days.
The digitisation of the Far East policy will the cargo trade of Russia with Asia-Pacific countries. The digitisation will further help to synchronise the business activities with export-import policies.
Why is India interested?
Major countries like China, Japan, and the USA have set their eyes upon the region as it is a hotbed of natural resources with the weak digital infrastructure. Hence, investing in the region would bring the geostrategic advantage for India over the Asian-Pacific trade.
Major Takeaways from the visit
- Russia and India signed around 50 trade agreements worth 5 billion dollars in presence of Japan and Korea
- PM Modi becomes the first-ever PM to have been invited to the EEF and visit Far East Russia.
- The move of the investment is made to counter the dominance of China over the resourceful yet economically weaker region.