China-based Asian Infrastructure Investment Bank (AIIB) report reveals that India may be compelled to join China’s BRI to grow infrastructural investments. AIIB report highlights that Indian Commercial Banks are suffering due to the weak balance sheet and credit risk, according to the Global Times.
The researchers informed the Global Times that India may be compelled to renegotiate and agree with China’s Belt and Road Initiative (BRI) as it needs a lot of infrastructural investments to boost its financial needs and also this issue can become part of India’s general elections in 2019.
China’s AIIB report raised issues regarding the financing and lending market in India which has resulted in the failure of Indian Infrastructural development and the Infrastructure Leasing and Financial Services company. The other issue is the high rate of non-performing assets among Indian Banks. All these issues are acting as a barrier to the implementation of the infrastructural projects, says Global Times.
“The AIIB’s report highlights India’s infrastructure transaction activity including completed and ongoing transactions slowed each year from 2014 to 2016. After reaching $72.7 billion in 2014, the figure dropped to $48.9 billion in 2015 and then to $40.4 billion in 2016”, cites Global Times.
In an interaction with the Global Times, Zhao Gancheng, the director of the Center for Asia-Pacific Studies at the Shanghai Institute for International Studies said: “The active motivation for India to join the AIIB at the outset comes from a domestic shortage of infrastructure construction and investment. The AIIB has a low-interest rate on its loans. Hence, India is giving positive reactions to the AIIB’s infrastructure projects.”
“India’s infrastructure finance needs are very large, and the country has the largest financing requirements because of its size and scale on the stage in its development,” Joachim von Amsberg, vice-president of policy and strategy for AIIB informed the Global Times.
The present scenario may force India to think about BRI as the country will gain an advantage in the financial market, after joining the initiative. The Global Times quotes Song Guoyou, director of Fudan University’s Center statement saying, “India may lose the opportunity to improve its domestic infrastructure and development in other areas if it continues to resist the BRI.”
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