Modi visit: India to open $1bn credit line to Mongolia
Ulan Bator, May 17
India will open a $1 billion credit line to bolster Mongolia’s “economic capacity and infrastructure”, the Mongolian and Indian prime ministers announced on Sunday. Mongolia is seeking investment in infrastructure for the transport of its minerals as well as in generating energy. Money has been tight for the Mongolian government since the coal market in China weakened and growth has slowed.
PM Modi said he hoped his visit would bring closer economic relations that could lead to cooperation in Mongolia’s minerals sector. India has no investments in Mongolia’s mines, although Indian companies have expressed interest in its coal.
Modi said economic relations between the two countries had been modest though that would change as India grew. “As the Indian economy adds strength to our region and the world, it will also benefit Mongolia,” he said. Modi began a three-nation Asian tour on Thursday with a focus on economic ties.
Before Ulan Bator, Modi visited the Chinese cities of Shanghai and Beijing. He is next scheduled to go to South Korea. Mongolian Prime Minister Chimed Saikhanbileg said India would be opening a $1 billion credit line that could be used for expanding the landlocked nation’s railway system.
Mongolia is building a rail link from its coal mines in the Gobi desert to overcome bottlenecks in deliveries to China, but it is seeking funding to finish the job.
Saikhanbileg also mentioned establishing a “joint investment fund” but he did not elaborate.
Indian and Mongolian officials signed 14 agreements in areas such as renewable energy, cyber security and dairy production.
Modi’s visit to Ulan Bator was the first by an Indian PM although India was the first country to open diplomatic relations with the north Asian country outside of the Soviet bloc, in 1955.
Modi said India and Mongolia shared friendly connections, recalling how millennia ago, Indians helped bring Buddhism.
“We have a strong convergence of views,” Modi said, adding: “We are starting a new era in our partnership.”
Modi described Mongolia as the new bright light among the world’s democracies. “Mongolia is the new bright light of democracy in our world,” Modi said while addressing Mongolian Parliament which was opened on a Sunday for his visit.
He described India-Mongolia ties as timeless in spirit and described the two nations as “spiritual neighbours”.
“Bonds of heart and minds have the strength to overcome the barriers of distance,” he said.
However, he said: “While the human bonds have been strong, our economic ties have been modest.”
He expressed the hope that ties between New Delhi and Ulan Bator “will progress along every avenue of the new age”.