India- Maldives signed Line of Credit | UPSC CURRENT AFFAIRS
India- Maldives signed Line of Credit:Current Affairs
India- Maldives signed Line of Credit
Context: India and the Maldives have signed a defence Line of Credit agreement worth $50 million.
What’s the News?
- India extended a $50-million line of credit to the Maldives for defence projects and the two countries signed an agreement to develop and maintain a key naval facility for the armed forces of the Indian Ocean archipelago.
- The agreement for developing the harbour at Uthuru Thila Falhu naval base were also signed.
What is Line of Credit?
- The Line of Credit is not a grant but a ‘soft loan’ provided on concessional interest rates to developing countries, which has to be repaid by the borrowing government. The LOCs also helps to promote exports of Indian goods and services, as 75% of the value of the contract must be sourced from India.
- The projects under LOCs are spread over different sectors (Agriculture, Infrastructure, Telecom, Railway, Transmission/Power, Renewable Energy etc.).
- Maldives is a small archipelagic statein South Asia, situated in the Arabian Sea of the Indian Ocean.
- The maritime boundarybetween the Maldives and India runs through 8 Degree Channel.
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