India extends $1-bn credit to Mongolia, expands economic engagement

India has extended a $1-billion line of credit to Mongolia to help the country expand its economic capacity and infrastructure, as the two countries decided to expand their mutual economic engagement to a "Strategic Partnership".

Prime Minister Narendra Modi with the Prime Minister of Mongolia Chimediin Saikhanbileg in Ulaanbaatar, Mongolia, on Sunday 17 May

Narendra Modi, the first Indian prime minister to visit Mongolia, held wide ranging talks with his counterpart Chimed Saikhanbileg at the capital Ulan Bator, following which the two sides signed 14 agreements covering defence, cyber security, agriculture, renewable energy and health sector.

"I am pleased to announce that India will provide a line of credit of $1 billion to support expansion of Mongolia's economic capacity and infrastructure," Modi said at a joint press meet with Saikhanbileg at State Palace.

Mongolia needs new markets for its minerals after China slowed down and it need to build infrastructure to transport its minerals as well as in generating energy. A weak coal market in China has affected Mongolia's finances, slowing its economic growth.

Indian Prime Minister Narendra Modi said he hoped his visit would bring closer economic relations that could lead to cooperation in Mongolia's minerals sector.

India has no investments in Mongolia's mines, although Indian companies have expressed interest in its coal.

''At a time when the global economy remains weak, the world speaks in one voice that India is the bright spot of hope to become the new locomotive for global economic momentum.

''We are conscious that our challenges are vast across India's immense social and economic diversity. But, we have faith in our sound policies and good governance.

''We draw confidence from the unity of our nation and the common purpose of our people. Even more, we get our energy from the aspirations of a young India, with 800 million youth under the age of 35 years. They are eager to pursue their dreams and confident in their ability to do so.

''So, as we transform the lives of our people, we also create opportunities for the world. And, we increase our ability to help our friends. This is the urge of the land of Buddha and Gandhi. This is the instinct born from our ancient belief in the world as one family,'' Modi said at the press briefing.

As the Indian economy adds strength to our region and the world, it will also benefit Mongolia, the Indian prime minister said, adding that with an impressive economic growth in Mongolia as well, bilateral ties will grow, despite the distance and demands of geography.

The two countries have agreed to cooperate in the digital world and work together to make it more secure against growing cyber threats.

India will lend its expertise in dairy farming to launch a white revolution on these vast steppes of Mongolia. ''We can work together to add value to Mongolia's pashmina resources right here. We can create partnerships for affordable modern healthcare in Mongolia. We can use our heritage of traditional medicines to improve holistic treatment in our countries and abroad. As Indians travel abroad more, Mongolia has the opportunity, with its natural and spiritual wealth, to become a major destination for them,'' he said.

''More than just trade and investment, our development partnership is a reflection of our shared ideals and vision. I believe that the greatest form of this partnership is investment in the development of human resources and institutions.

''This gives a nation its own capacity to shoulder the responsibility for its progress. It enhances its independence of choice. And, it makes progress more sustainable.

''We remain deeply committed to this vision,'' Modi said.