Despite disputes, Hindi-Chini seems to be bhai bhai when it comes to borrowing and lending. India is the top borrower of China-led Asian Infrastructure Investment Bank. Last year seems to be the tough year for the two neighbouring nations as their relations worsened rapidly.
The AIIB has approved five projects in India. These are — Bangalore Metro Rail Project, Transmission System Strengthening Project, Gujarat Rural Roads (MMGSY) Project, India Infrastructure Fund and Andhra Pradesh 24×7 – Power For All project.
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The total loan sanctioned by AIIB to five Indian projects is US$1.074 billion. This accounts to almost 28 per cent of the total money the bank has lent to 24 infrastructure projects worldwide.
The biggest AIIB loan approved is US$335 million for Bangalore metro rail project that includes 22km of railway line and 18 stations.
The Asian Infrastructure Investment Bank started its operations in January 2016 with its headquarters in Beijing. It has now 84 approved members from around the world. China president Xi Jinping proposed the setting up of the bank in 2013.
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Interestingly, China holds just under 27 per cent of its voting shares in the bank followed by India with 7.7 per cent of the votes and Russia with 6.1 per cent and Germany with 4.27 per cent. Beijing has the effective veto power required for major decisions to be taken by the bank.
Economists however views China’s support of lending to India as ‘business-based decision’.
Apart from these five projects, India is also asking for US$500 million for a metro line in the west coast city of Mumbai, which if approved, would be the AIIB’s biggest loan.