Indian companies to get concessional financing for important infra projects abroad

The government has approved the proposal to enable EXIM bank for providing a concessional finance to support Indian companies bidding for strategically important infrastructure projects abroad. This will help Indian companies to bid for large projects abroad.

The finance ministry has said that the strategic importance of a project to deserve financing under this scheme will be decided on a case by case basis by a Committee chaired by Secretary (DEA) and it will include members from Department of Expenditure, Ministry of External Affairs, Department of Industrial Promotion and Policy, Department of Commerce, Department of Financial Services and Ministry of Home Affairs. 

Further it stated that the committee will have powers on conditions within reasonable limits on a case by case basis during first two years of implementation of the scheme and will also consider financing strategic projects through public sector banks other than EXIM Bank on the same terms. The committee may insist on sourcing of at least 75 per cent of the project requirements from India, if it is found compatible with the requests for bids, adding that the experience with this scheme will be evaluated after two years. The repayment of the loan would be guaranteed by the foreign government.

There are a number of Indian large project implementation companies which have developed a lot of expertise in building large infrastructure projects. However, due to higher cost of finance in India, they have not been able to win contracts abroad. Hence, need was felt to help such Indian Companies to secure contracts abroad.