New Delhi (Sputnik) — The MoU between Export-Import Bank of India (EXIM Bank) and Export-Import Bank of Korea (KEXIM) will be signed between the two banks during the forthcoming visit of Indian finance minister Arun Jaitley to Korean capital Seoul on June 14-15, 2017 for the Annual Financial Bilateral Dialogue.
"The export credit will be utilized through lending by EXIM Bank for promoting projects for priority sectors, including smart cities, railways, power generation and transmission etc, in India and for the supply of goods and services from India and Korea as part of projects in third countries," a finance ministry statement said.
The $9 billion credit to be extended by KEXIM to India comes at an interest rate as per OECD export credit guidelines with a certain level of Korean import content. This amount may also be utilized by KEXIM as the financier without the participation of EXIM Bank subject to satisfaction of the purpose. The supply of goods and services from India and Korea as part of projects in third countries will be an additional avenue which this MoU will enable.
South Korea had expressed its intention to offer $ 10 billion during the visit of Indian Prime Minister Narendra Modi to South Korea in 2015. India is in dire need of foreign funds to meet demand of $646 billion over the next five years for infrastructure development. Two-thirds of this amount will be required in the power, roads and urban infrastructure sectors.
