Dhaka, New Delhi signed first defence contract under $500 million LoC

Bangladesh and India have signed the first contract under $500 Line of Credit (LoC) which India finds an "important first step" in strengthening defence cooperation between the two countries.

"I think the first contract under the defence Line of Credit  was signed earlier this week. I'm sure you have been following this closely. It was a modest amount but it was an important first step," said Indian Foreign Secretary Vinay Kwatra in New Delhi on Tuesday night.

The Indian foreign secretary said it may be a defence LoC but it is also a part of the development partnership framework.

"Our effort is that this will open up a path for further engagement between the two countries in the field of defence and security and take our cooperation further," he added.

Prime Minister Sheikh Hasina, now visiting India, and her Indian counterpart Narendra Modi expressed satisfaction at the "intensification" of bilateral defence ties.

They also agreed for early finalization of projects under the Line of Credit for defence, which would be beneficial for both the countries, according to the joint statement issued after the bilateral talks between the two leaders.

India welcomed the finalization of "initial procurement plans" for vehicles for the Bangladesh Armed Forces in this regard and looked forward to enhancing bilateral defence ties.

The Indian side reiterated its request for implementing the 2019 MoU for providing a coastal radar system for greater maritime security at an early date.

At the 4th Bangladesh-India annual defence dialogue held in New Delhi in August, both sides emphasised the need to work closely to implement the $500 million line of credit extended from India for defence items.

Bangladesh and India, at the dialogue, expressed commitment to elevating engagements between their armed forces and reviewed the progress of bilateral defence cooperation initiatives.

Principal Staff Officer of Armed Forces Division of Bangladesh Lieutenant General Waker-Uz-Zaman and Indian Defence Secretary Ajay Kumar co-chaired the dialogue.

Different aspects of defence industrial and capability-building cooperation came up for detailed discussions.

Both countries explored potential for cooperation in defence trade, co-development and joint production.

Meanwhile, Indian daily The Hindu reported that Bangladesh has recently shared a wish list of military platforms and systems that its armed forces would like to procure from India, according to official sources marking some progress on the delayed implementation of the $500 million defence LoC extended by India to Bangladesh.

This includes a diverse range of equipment, including a floating dock, and logistics ship and oil tanker for the Bangladesh Navy, among others.

Quoting unnamed source, The Hindu reported that the Bangladesh Army has approved procurement of three items, so far, under the LoC — five Bridge Layer Tanks (BLT-72) at a cost of approximately $10 million; seven portable steel bridges (Bailey) at a cost of around $2.2 million; and 11 Mine Protective Vehicles from the Tata Group at an approximate cost of $2.2 million.

Other items proposed to be procured by the Bangladesh Army are Mahindra XUV 500 off-road vehicles; door hard top vehicles from Mahindra at an approximate cost of $2.35 million; heavy recovery vehicles; armoured engineer reconnaissance vehicles; and bullet proof helmets.

The Bangladesh Navy has proposed the procurement of a logistics ship, floating dock, oil tanker, and an ocean-going tug, the source stated.