India to support China's Asian Infrastructure Investment Bank

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India to support China's Asian Infrastructure Investment Bank

India could support the Asian Infrastructure Investment Bank proposed by China as part of the new government's new policy to deepen regional cooperation.

Local sources in India reported that a senior finance ministry official said:

"We are looking at it positively. In principle the view is to join it."

The Asian Infrastructure Investment Bank (AIIB) is an international financial institution proposed by China. AIIB is regarded as a rival for the IMF, the World Bank and the Asian Development Bank (ADB) which the AIIB says are dominated by developed countries like the USA and Japan.

Chinese President Xi Jinping had first mooted the idea of establishing an infrastructure bank last October. In June 2014 China proposed doubling the registered capital of the bank from 50bn USD to 100bn USD and invited India to participate in the founding the bank. Both countries inked a five year trade and economic cooperation pact during Xi Jinping's India visit last month.

A number of Asian countries such as Thailand, South Korea and Singapore have already shown interest in participating in the initiative.

India has offered China infrastructure projects in the public-private partnership mode. India would need at least $1 trillion in the next five years to fund its infrastructure development with the new government proposing 100 smart cities. And, the new multilateral bank could provide another funding avenue for New Delhi.

India could also be looking at reducing the bilateral trade imbalance and strengthen investment cooperation to realise $20 billion investment from China.

Brazil, Russia, India, China and South Africa (BRICS) have already joined hands to float the Brics Bank. The latter will be headquartered in Shanghai but India will have the presidency for initial five years.

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