Business Recorder reports the Ministry of Finance has advised the Ministry of Defence Production to seek ECC approval for establishing such a facility before starting negotiations and finalizing terms and conditions.
During a visit to Sri Lanka in February 2021, prime minister Imran Khan announced this defence credit line to enhance bilateral defence and security cooperation.
Accordingly, a draft MoU was prepared and shared with the Ministry of Foreign Affairs, Ministry of Finance and Economic Affairs Division.
The Ministry of Foreign Affairs has concurred with the draft.
Currently, the MoU is in the process of vetting by Economic Affairs Division and Finance Division.
In a recent development, MoDP has been advised by the Finance Division to obtain principle approval of ECC/ Cabinet for its opening, before engaging in negotiations with the bilateral partner.
The Finance Division has supported the proposal in principle.
The Ministry of Defence has sought principle approval of ECC for extending the facility in terms of Rules 16(1) d) of the Rules of Business 1973.
Sri Lanka, in last few decades, has emerged as one of the largest markets for the indigenously produced military hardware of Pakistan.
However, owing to financial constraints of Sri Lanka, business between the two countries remains much below its potential.
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