Opinion

Prime Minister Modi’s Latest Geopolitical Masterstroke! India will help Mongolia build its first Oil Refinery

Prime Minister Modi has ushered in an era of bold and aggressive foreign policy. During Manmohan Singh’s times, India had no foreign policy which has been said by Congress stalwart Natwar Singh. In about three years time, Prime Minister Modi has transformed a stagnant, in fact deteriorating foreign policy apparatus into India’s strength that is being recognized the world over.

The latest ingenious move of the Modi government is to help Mongolia – a nation bordering China and one that has troubled ties with China – build its first oil refinery.

Beijing had blocked essential food supplies to Mongolia after Dalai Lama had visited Ulaanbaatar. New Delhi swooped in to replace Mongolia’s disintegrating ties with China with warmth and a promise of burgeoning ties with India.

Mongolia wants to reduce its dependency of oil on its neighbours, and this oil refinery will go a huge way in doing so. The two will soon begin construction of the refinery. The Engineers India Limited (EIL) has developed the detailed project report (DPR) of the refinery while the Mongolian Oil Refinery will work as the focal agency of the project.

The refinery will have a processing capacity of 1.5 million metric tons of oil per year and will annually produce 5,60,000 tons of gasoline and 6,70,000 tons of diesel fuel, as well as 1,07,000 tons of liquefied gas. The refinery could boost Mongolia’s gross domestic product by 10 percent.

Cooperation with Mongolia is of utmost importance to India’s foreign policy interests. The Narendra Modi government is focusing on this and rightly so. Rajnath Singh is scheduled to visit Mongolia early next year. Soon after that, Mongolian President Khaltmaa Battulga, a vocal critic of China, will visit India. He is an advocate of reducing Mongolia’s dependency on China and has overwhelming backing of the Mongolian people in this pursuit.

In 2015, Prime Minister Modi had made a historic visit to Mongolia. He had provided a line of credit to the nation that included a $700 million loan for the oil refinery and $264 million for oil pipelines. The 20-year loan will have an interest rate of 1.75 percent and principal payments will be waived during the first five years. Even though ties are strictly economic at the moment and will remain so for the years to come, having a trusted friend on China’s border could well prove to be of huge advantage militarily in case of a conflict.


Vinayak Jain

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