India will provide Mongolia with a $1 billion line of credit to help fund railway, power and other infrastructure projects, a much-needed boost for the north Asian country struggling to right its slowing economy.
â€œWe will take our economic partnership to a new level,â€ Indian Prime Minister Narendra Modi said today at a joint press conference with his Mongolian counterpart, Saikhanbileg Chimed.
Mongolia is looking for ways to finance and expand a network of road and rail corridors to help increase mineral exports to China and beyond. Itâ€™s also developing new coal fired power plants and wind farms to reduce energy reliance on neighboring Russia.
Mongolia has seen its economic growth slow from a world-beating 17.3 percent in 2011 to 7.8 percent last year amid a flight of foreign investment and low commodity prices. Modi today mentioned mining as a sector for joint cooperation, without providing details.
While trade between the two countries is almost negligible, just $16 million last year, Mongolia looks to India for a spiritual connection as the majority of its citizens follow Buddhism, founded in India 2,500 years ago.
Modi, the first Indian premier to pay a working visit to Mongolia, began his visit today at Gandan Monastery where he presented a sapling of the Bodhi tree.
He addressed lawmakers at a special session of Parliament and is due to attend a Mongolian sports festival.
India and Mongolia signed more than 10 agreements, including cooperation on border security, health, renewable energy, dairy farming and cyber security.
Mongolia is Modiâ€™s second stop on a three-nation tour that also includes China and South Korea.
Originally from Bloomberg