IDEAS programme

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, has given its approval for second extension to the Indian Development and Economic Assistance Scheme (IDEAS). IDEAS has been a line of credit to African and other developing countries since 2005-06. It has been decided to give second extension to the Scheme for another five years i.e. from 2015-16 to 2019-20.

A Line of Credit (LOC) is a financing mechanism through which Exim Bank extends support for export of projects, equipment, goods and services from India. Exim Bank extends LOCs on its own and also at the behest and with the support of Government of India. Exim Bank extends Lines of Credit to: a) Foreign Governments or their nominated agencies such as central banks, state owned commercial banks and para-statal organizations; b) National or regional development banks; c) Overseas financial institutions; d) Commercial banks abroad; and e) Other suitable overseas entities.

The recipients of LOCs act as intermediaries and on lend to overseas buyers for import of Indian equipment, goods and services. LOC is a financing mechanism that provides a safe mode of non-recourse financing option to Indian exporters to enter new export markets or expand business in existing export markets without any payment risk from the overseas importers.

The IDEA Scheme, with suitable modifications and amendments, will continue to be implemented through the Department of Economic Affairs (DEA) in the Ministry of Finance. MEA selects specific projects keeping in view diplomatic considerations and requests received from various developing countries. The LOC will be operated through Export Import Bank of India or any other willing bank/ lending agency decided with the approval of Finance Minister.

Lines of Credit form an important component of India's diplomatic strategy and have been very useful in generating goodwill and building long term partnerships. The scheme also attempts to promote India's strategic political and economic interest abroad by positioning it as an emerging economic power, investor country and partner for developing countries.

96 LoCs aggregating $5,005.75 million were issued through Exim Bank during the period 2005-06 to 2009-10 to 49 countries. On the last occasion, while granting first extension to the IDEA Scheme, CCEA in its meeting held on 3.3.2011, had approved a sum of $1,200 million Lines of Credit to be extended to African countries and $500 million for non-African developing countries for each of the five years from 2010-11 to 2014-15.