The Indian Union Ministry of Road Transport and Highways intends to establish a new firm called NHAI International, which will take up road development projects overseas.

This firm would not form part of the existing National Highways Authority of India (NHAI).

Union minister for road transport Nitin Gadkari was quoted by Livemint.com as saying that it will operate on a revenue concept where loans from banks would be taken in US dollars rather than in rupees at interest rates of 2% as this works out cheaper.

"This is part of India’s efforts to bolster road links with neighbouring countries in South Asia."

The minister said: "From our experience of shipping, we have realised that till date, we had been dealing loans in Indian Rupees due to which we were being charged 12% rate of interest. But this comes down substantially down when the same trading is done in US Dollars."

NHAI International would develop projects such as the planned an undersea tunnel between India and Sri Lanka, roads to Iran’s Chabahar port and the Bangladesh-Bhutan-India-Nepal road.

This is part of India’s efforts to bolster road links with neighbouring countries in South Asia.

This entity would serve as a contractor for neighbouring countries, as well as undertake construction and consultancy services for international projects of Indian and foreign governments.

The company would also have several international offices.

The government currently outsources overseas road construction work as it does not have a dedicated entity.