India and Seychelles have concluded an umbrella line of credit agreement worth Rs 1250 crore, to be extended in rupees, for supporting priority development projects in Seychelles, according to a special press briefing by Foreign Secretary Vikram Misri in Victoria. The announcement came during Prime Minister Narendra Modi's ongoing state visit to Seychelles from June 27 to June 29 at the invitation of President Herminie.
Key Details of the Agreement
- Instrument: Umbrella line of credit, extended in Indian rupees.
- Value: Rs 1250 crore.
- Purpose: To support priority development projects in Seychelles.
- Parties: Government of India (through Export-Import Bank of India or similar, not specified in source) and Government of Seychelles.
Foreign Secretary Vikram Misri, speaking at the press briefing, stated, "The two sides have concluded an umbrella line of credit agreement which will be extended in rupees and amounts to Rs. 1250 crore. It will be used to support priority development projects in Seychelles." The line of credit is a key instrument under India's development partnership with Seychelles, reinforcing bilateral economic ties.
Related Agreements and Developments
Alongside the line of credit, the two countries signed several other agreements:
- UPI MoU: The National Payments Corporation of India and the Central Bank of Seychelles signed a Memorandum of Understanding for deploying the Unified Payment Interface (UPI) from India in Seychelles.
- Extradition Treaty: A treaty aimed at combating transnational crime was signed.
- Space Cooperation MoU: An MoU on cooperation in exploration of outer space for peaceful purposes was also concluded.
Prime Minister Modi also indicated that New Delhi would look into Seychelles' request for assistance in setting up AI and cyber security centres, along with an advanced light helicopter.
Regional Context and Significance
Misri reiterated Prime Minister Modi's remarks on how India and Seychelles are connected by the Indian Ocean, calling it "an ocean of opportunity," and emphasised that ties between the two countries will continue to be based on trust, respect, and mutual priorities. He underlined Seychelles as an important partner for India and the vision MAHASGAR, along with commitment to the Global South. The visit also saw PM Modi receiving the Guardian of the Blue Horizon award, highlighting his leadership in combating climate change and preserving the shared environment, according to Misri.
| Agreement Type | Details |
|---|---|
| Umbrella Line of Credit | Rs 1250 crore in rupees for priority development projects |
| UPI MoU | NPCI and Central Bank of Seychelles for UPI deployment |
| Extradition Treaty | Aimed at combating transnational crime |
| Space MoU | Cooperation in outer space exploration |
Implications for Trade Finance
For trade finance bankers and ECA officers, this line of credit signals enhanced bilateral credit support for projects in Seychelles. The use of rupees for the credit line aligns with India's push for internationalisation of the rupee, reducing currency risk for Indian exporters and financiers. The UPI MoU may further facilitate cross-border payments and remittances, easing transaction flows. The line of credit will likely be administered through India's export credit agency, providing financing for Indian exports of goods and services to Seychelles. This agreement opens opportunities for project finance, particularly in infrastructure, AI, and cybersecurity sectors, where Seychelles has requested assistance.
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