Eyeing South American defence market, India extends credit line of $23.37 million to Guyana for purchase of 2 aircrafts

Strategically eyeing the defence market of South America, India has extended a Line of Credit (LOC) of $23.37 million to Guyana for the procurement of two Dornier 228 aircraft from navratna defence PSU Hindustan Aeronautics Ltd (HAL).

The South American country is also in talks with India to acquire armoured vehicles, patrol vessels and radar systems. 

Competing against dominant arms manufacturing countries like Russia, the USA, and China, India is making efforts to scale up defence cooperation with South American countries, exporting among others bulletproof jackets and TNT explosives to Brazil. Besides, Taurus Armas SA of Brazil has tied up with Jindal Defence Private Limited to jointly manufacture small firearms at a facility in Hisar, Haryana.

Another South American country India is deeply engaged with is Argentina. In July 2023, HAL and Argentina singed a Letter of Intent (LOI) on productive cooperation and acquisition of light and medium utility helicopters for the armed forces of the South American country.

It has also shown interest in LCA Tejas and BrahMos supersonic cruise missile systems which India is exporting to Philippines.

Guyana Defence Force

The HAL will now enter into a contract for the export of two Dornier transport aircraft to Guyana at a cost of $23.37 million, the Exim Bank said on Tuesday.

The LOC agreement was signed on March 15 between Ashni K Singh, Senior Minister in the office of the Guyana President looking after Finance and Public Service, and Sanjay Lamba, Deputy General Manager of the Exim Bank. High Commissioner of India to Guyana, Amit Telang was also present on the occasion, Exim Bank stated.

The move is expected to strengthen defence ties between the two countries. Earlier India had offered 19 defence training slots to the Guyana Defence Force (GDF) under its Indian Technical and Economic Cooperation (ITEC) Programme. These training slots under the ITEC Programme, a leading capacity-building platform of the Ministry of External Affairs, included 10 courses of Army, 4 of Naval and 5 of Air Force.

Over the years, Guyana alone has received eleven LOCs of value aggregating $143.04 million from the Exim Bank for capacity enhancement in sectors of defence, and others like the construction of a cricket stadium in Georgetown, for East Bank-East Coast Road linkage project, upgradation of three primary health centres, and installation of solar home lighting systems.

“With the signing of this LOC Agreement, Exim Bank has now in place 292 LoCs, covering 62 countries in Africa, Asia, Latin America, CIS, and Oceania, with credit commitments of around $2.72 billion, available for financing exports from India,” the Bank informed. Besides promoting India’s exports, the Exim Bank said. Its LOCs enable demonstration of Indian expertise and project execution capabilities in emerging markets.

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