India on Monday signed a $72.55 million line of credit agreement with Laos for hydropower projects as part of New Delhi's efforts to step up its presence in this Asean country.
The agreement for the line of credit, which was finalised earlier during President Pratibha Patil's five-day state visit, was signed by Exim Bank executive director Prabhakar Dalal on behalf of India and minister of finance of Laos, Somdy Douangly after a India-Laos Business Forum meeting here.
The line of credit is for 230 KV double circuit transmission line from Nabong to Thabok and sub-stations worth $34.68 USD, and 15 MW Nam Boun 2 hydro project worth $37.86 million, Indian officials had said.
Some Letters of Intent and MOUs were also signed by Indian Chamber of Commerce in Laos with CII, Ficci and Assocham. A 45-member strong delegation of CII, Ficci and Assocham members was here to attend the India-Laos Business Forum meeting.
During her address to the India-Laos Business Forum, President Patil said, "I can assure that India will continue to be a development partner of Laos." She appreciated the efforts being made by Laos to move out of the Least Developed Country category by 2020.
"We have been following the encouraging progress made by Laos. The average GDP growth of Laos in the last five years has been 7.8 per cent," she said. Laos has potential for foreign investment in mining, hydropower, construction, roads, railways as well as in agriculture, but has remained largely unexplored by Indian business houses.
"Laos is open to foreign investment and, I understand that a series of business laws have been enacted in Laos to simplify investment procedures and regulations. I think that there is insufficient knowledge in India of this change in Laos, and I call upon this Forum to address this issue so that Lao and Indian businessmen understand each other better," Ms Patil said.
She maintained that bilateral trade between India and Laos was currently "quite modest" below $7 million. "With a trillion dollar economy, India is already the fourth largest economy in the world in Purchasing Power Parity, and is posed to rise to the third rank. The vast Indian market offers many opportunities for Lao exporters," Ms Patil said.
The Indian President also asked Laos to complete the India-Laos Free Trade Agreement soon as it would benefit the two countries. She urged Indian businessmen to look at modules that promote business with South-East Asian region in an integrated manner.
The five-day state visit to Laos saw President Patil holding interactions with Laos President Choummaly Sayasone and Prime Minister Bouasone Bouphavanh.
Other than exploring business prospects, India is also looking at strengthening cultural ties with Laos which is a predominantly Buddhist nation with strong Hindu roots.
Ms Patil visited former Laos capital and historical city of Luang Prabang where the traditional Baci ceremony was performed in her honour. She visited the ancient Xiengthong temple there during the tour.