In 2003-04, The Government of India (GOI) formulated the Indian Development Initiative (IDI), now known as Indian Development and Economic Assistance Scheme (IDEAS) with the objective of sharing India's development experience through:
- capacity building and skills transfer,
- trade, and
- infrastructure development,
by extending concessional LOCs routed through Exim Bank, to developing partner countries, towards creating socio-economic benefits in the partner country.
The Ministry of External Affairs (MEA) has now set up the Development Partnership Administration (DPA) Division to deal with India's development assistance programmes abroad, including LOCs routed through Exim Bank. These LOCs are increasingly being extended to partner countries for large-scale and complex projects (project exports from India).
Both, bilateral and multilateral assistance, typically follow a sequence of standard procedures:
- project identification and preparation,
- review and approval of the project proposal,
- offer of the loan, acceptance and execution of loan agreement,
- project implementation, monitoring and supervision, and
- socio-economic impact assessment after project completion
Lessons learned from the impact assessment / evaluation act as a feedback to the preparation, review and implementation of future projects. This process forms the 'project cycle'.
Requirement as to import of goods and services from India
These loans are for project exports and the import of goods and services from India.
Goods and services (including consultancy services) for minimum 75% value of the contracts covered under these loans must be sourced from India. (A relaxation of 10% may be considered on a case-to-case basis)
LOCs may finance upto 100% value of contract on FOB/CFR/CIF/CIP basis.
Soft loans under the scheme shall be free from all kinds of taxes and duties of any nature whatsoever levied in the recipient country (including all corporate/personal/value added taxes, import/custom duties, special levies and social security contributions) for temporary employees deputed by Indian exporters in relation to the project execution in the recipient countries.
GOI Guidelines on LOCs
LOC Brochure - English
LOC Brochure - French