Development cooperation is an integral part of India’s foreign policy and India has been extending cooperation to its fellow developing countries even before its independence in 1947. In present times, India’s development cooperation is manifested through its ‘development compact’ comprising five components, namely, capacity building and skill transfer, technology and related partnerships, development finance (which includes concessional loans and lines of credit), grants, and trade and investment. Off late, Indian extension of Lines of Credit (LoCs) through EXIM Bank of India have also become a prominent modality of Development Cooperation. However, in many a cases it has been seen that the projects faced a number of challenges for effective delivery. This discussion paper explores these challenges and other issues related to quality and timely delivery of the projects. It also explains evolution of the scheme IDEAS and discusses new guidelines by EXIM Bank.