India's PM Modi offers Nepal $1.25 billion loan in regional diplomacy push
Published on Aug 3, 2014 11:00 PM
KATHMANDU (Reuters) - Indian Prime Minister Narendra Modi offered Nepal US$1 billion (S$1.25 billion) in concessional loans to help build power plants and roads during a visit on Sunday aimed at shoring up support in a region where China is making inroads.
Both India and China are vying for political influence in South Asia, home to more than 1.5 billion people, by offering closer integration with their giant economies.
India has long been the dominant force in the region. But in recent years as its economy slowed and it struggled with policy paralysis, China has stolen a march, building ports from Sri Lanka to Bangladesh and power plants in Nepal.
Mr Modi is on a two-day visit to Kathmandu to help speed up negotiations on a power trade pact that is at the centre of his new diplomatic drive. "Nepal needs highways, information ways and transmission ways. India will support you in all these," he said in an address to the Nepali Parliament, where he announced the US$1 billion credit line for the landlocked nation. "Nepal can use this on hydropower and infrastructure projects of its choice," he said to thunderous applause in a Parliament chamber where politicians in the past have often targeted India as a "big brother" meddling in its affairs.
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