Irshad Salim — A new development bank established by Russia, China, India, and Brazil is providing three of those countries with $1.4 billion in loans ahead of a meeting of the major developing countries next week.
The loans were announced by the New Development Bank, which was set up in 2014 to be an alternative to the Washington-based World Bank.
Of the total, $460 million will go toward updating the computer system of the Russian judicial system, $470 million toward developing rural water supplies in India, and the rest toward energy conservation and flood control in China, report AP, TASS, and Interfax.
Indian Prime Minister Narendra Modi, Russian President Vladimir Putin, Chinese President Xi Jinping, and other leaders of the BRICS (Brazil, Russia, India, China, and South Africa) plan to attend the summit in Xiamen, China, on September 4-5.
Xi and Modi are expected to hold talks on the summit sidelines, officials in New Delhi said.
Ahead of the summit, China and India, the world’s most populous nations, announced ending their two-and-half-months long border standoff near Bhutan as China said said earlier this week it will beef up patrols along its border with India near Bhutan.
Both sides did not disclose what the tradeoff was.
Chinese Foreign Minister Wang Yi on Wednesday told a news briefing in Beijing that “There is huge potential for cooperation between China and India,” without giving details. “It was normal for the two neighbors to have differences,” Wang added.
According to some analysts, much as China’s untapped market once exerted a pull on the West, India now attracts China. Companies including Chinese smartphone maker Xiaomi Corp. count India as their largest overseas market. Indian consumption will triple to $4 trillion by 2025, Boston Consulting Group estimates, and the country plans a $59 billion infrastructure upgrade. But only about 3% of Chinese exports now go to India – a huge market for China on its south.
“The potential could be huge,” said Li-Gang Liu, Citi Research economist, of Chinese exports to India. “However, fulfilling this potential remains a challenge, affected not only by tariffs and trade protectionist measures on both sides, but also political risks such as border disputes and standoffs.”
India, according to some observers, have somewhat developed a comfort zone in the region, with the US as its strategic and defense ally– Trump announced his South Asia policy last week, in which he said his administration seeks Afghan and regional peace with India on board.
In July, India, the United States and Japan completed a 10-day Malabar 2017 naval exercise in the Bay of Bengal, while around the same time the US approved a $365-million sale of military transport aircraft to India and a $2-billion deal for surveillance drones.
As a result, the Indian navy now has eight Boeing P-8A Poseidon submarine hunters patrolling in the Indian Ocean where China’s navy held a rare live- fire drill last week to improve its fleet’s performance under real combat circumstance, China’s state-run Xinhua news agency reported.