Rural India [File photo: Quanjing.com]

India signed a loan agreement with Asian Infrastructure Investment Bank (AIIB) for providing loan of 329 million U.S. dollars to improve rural road connectivity in western state of Gujarat, officials said Saturday.

"The loan and project agreements for AIIB lending of 329 million U.S. dollars for Gujarat rural roads project have been signed between the government of India, government of Gujarat and the AIIB yesterday in New Delhi," a finance ministry official said. "The objective of the project is to improve the rural road connectivity and accessibility in rural areas of Gujarat.

According to officials the project would benefit about 8 million people in the state by providing all weather road connectivity to 1,060 villages in 33 districts.

The project would envisage constructions and up-gradation of non-plan roads (NPRs), besides up-gradation of planned roads.