Cabinet approves MoU between Exim Bank and New Development Bank for trade development

The union cabinet on Thursday gave its approval for signing of a memorandum of understanding (MoU) on general cooperation with the New Development Bank (NDB) to enhance trade and economic relations among the BRICS countries.

The proposal will be implemented through the BRICS Interbank Cooperation Mechanism by the Department of Economic Affairs and the Export Import Bank of India and there will not be any financial implication involved with signing of the MoU.

The MoU is a non-binding umbrella agreement aimed at establishing a cooperation framework in accordance with the national laws and regulations, besides skills transfer and knowledge sharing amongst the signatories. Further, establishment of the NDB, which reflects the close relations among the BRICS countries, provides a powerful instrument for increasing their economic cooperation and help India play an enhanced international role.

Therefore, keeping in view the strategic relevance of cooperation for sustainable development and inclusive economic growth, the signing of MoU is necessary in the context of cooperation extended by the members in various forms for promoting and facilitating trade of goods and services as well as investments in mutual projects among the BRICS countries.

The MoU will benefit the participating institutions from the BRICS nations.

Five banks from the BRICS nations had established the BRICS Interbank Co-operation Mechanism to enhance trade and economic relations amongst the BRICS countries, and enterprises.

The BRICS Interbank Co-operation Mechanism now proposes to sign a memorandum of understanding (MOU) on general co-operation with the New Development Bank.