Why Is India Helping Magnolia Build Infrastructure Projects?

India is building refinery project in Mongolia under its Line of Credit (LoC) programme. The project, being the largest undertaken under LoC progarmme, is expected to help Mongolia reduce its import dependence.

On October 9, Union Petroleum and Natural gas Minister Dharmendra Pradhan participated in a commissioning ceremony of infrastructure facilities constructed to support the proposed 1.5 MMT oil refinery project in Mongolia.

Key Facts

  • Magnolia has large uranium deposits
  • It had signed a civil nuclear cooperation with India in 2009
  • India has been warming up to Mongolia ever since China started unfolding its Belt and Road Initiative


Mongolia is sandwiched between China and Russia, and India’s attempt to boost its ties with Country comes in the backdrop of China extending its reach into South Asia. China has significantly improved its relations with Sri Lanka and Nepal. Myanmar already has a strong relation with China.

Under its One Belt One Road (OBOR) infrastructure initiative, China is investing billions of dollars in infrastructure projects across Asia, Africa and Europe.

Indian Strategy

India is opposed to BRI and its strategy is to highlights the potential risks of it. Chinese initiative neither respect sovereignty nor it has any concerns for environmental degradation. Worse, it is forcing smaller countries to fall into debt trap.