New Delhi (Sputnik) — That India-China compete in various geographies to gain strategic and economic advantage is common knowledge, but what’s new is that smaller economies are trying to encash the rivalry to their advantage – in this case Mongolia.
A statement put on Mongolian Prime Minister Erdenebat Jargaltulga’s website shows that he has asked relevant ministries to negotiate with India’s Exim bank to seek approval to build an oil refinery and pipelines with $1 billion in infrastructure funding that was negotiated last year. The project could boost the nation’s gross domestic product by 10 per cent. The Mongolian government intends to use $700 million of the loan for an oil refinery and $264 million for oil pipelines, the statement said.
Located in Sainshand county, the refinery will have a capacity to process 1.5 million metric tonnes of oil per year. It will produce 560,000 tonnes of gasoline, 670,000 tonnes of diesel fuel and 107,000 tonnes of liquefied gas annually. The 20-year loan will have an interest rate of 1.75% and principle payments will be waived during the five years. The $1 billion credit line agreements were signed during Prime Minister Narendra Modi’s visit last year to fund railroad and infrastructure projects in Mongolia.
"We have a long spiritual relationship with India. It's important that India raises its voice against the unilateral measures China is taking against us which is hurting our people especially when severe winter is upon us,” Gonchig Ganbold, Mongolia's ambassador to India told the media earlier in December.
Mongolia imported 346,500 tonnes of gasoline worth $172 million and 479,800 tonnes of diesel worth $219 million in the first 11 months of this year, according to the NSO. More than 97% of the petrol and diesel was imported from Russia.