India, China Exim banks to exchange credit lines

For the first time, the export-import (Exim) banks of India and China are discussing exchange of reciprocal lines of credit which would further stimulate the booming trade between the two countries.

"The Exim banks of the two countries have had an initial exchange of views on exchange of reciprocal lines of credit to finance project exports in each other's country," said Chairman and Managing Director of the Export-Import Bank of India, T C Venkat Subramanian.

China had extended a credit line of $ 100 million last year for financing export of Chinese capital goods to India. Following this, the Exim Bank of India was designated as the nodal agency in the country to discuss the matter further.

"The Exim Bank of India, with the approval of the Government of India, has also proposed a reciprocal credit line," Subramanian said, adding the two sides will hold further consultations to finalise the arrangement.

He said the Chinese side was studying the Indian proposal since the Chinese Exim Bank was not engaged in financing imports unlike the Exim Bank of India which does both "" financing exports and well as imports.

Similarly, he said the two sides should explore the possibility to promote trade finance and bilateral letter of credit confirmation facility which will be useful to boost trade from the current seven billion to 20 billion "within a short period."