Putting Indian insurers and reinsurers in a major dilemma, New Delhi today declined to spell out its stance on a possible funding of a project linked to Beijing's ambitious USD 4 trillion One Belt One Road (OBOR) initiative by the Asian Infrastructure Investment Bank (AIIB).
"These things (loan proposals) are discussed at the board level and the final decision is taken keeping all interests and viewpoints in mind. We don't make our stand outside the boardroom," said interim Finance Minister Piyush Goyal who was in Mumbai on Sunday to attend the third Annual Meeting of the Asian Infrastructure Investment Bank (AIIB).
The minister was replying to a specific question on the government stance if a proposal for funding to a project linked to the OBOR initiative comes up before the AIIB.
“Though projects related to the OBOR provides a huge ibusiness opportunity for us, we don't konw as yet, whether we can participate in these projects, as Indian government is not participating in the plans to develop mega infrastructure projects around the globe. We would wait a till further clarity emerges to take any decision ,'' said a state owned GIC Re official.
Though Indian insurers and reinsurers will not participate directly in insuring the projects, sometimes, they have to participate in the retrcession programme– insuring a reinsurer- of global insurers and reinsurers who would provide coverage to the OBOR projects.
So far, no project lending proposal linked to the OBOR has come up for funding before the AIIB, where China is the biggest owner with 31 per cent stake, economic affairs secretary SC Garg added.
India, the second largest shareholder of AIIB with an 8 per cent stake, has been opposed to the OBOR, which is building transcontinental roads, railways and ports.
Government is specifically concerned about the USD 57 billion China-Pakistan Economic Corridor (CPEC) that passes through the Pakistan-Occupied-Kashmir and is fully funded by Beijing under the OBOR.
Reminding that the AIIB has 86 member-countries, Garg said no one should feel that the bank "belongs to a particular country" and pointed out that there have not been any OBOR- linked projects that have come up for lending at the multilateral body.
"In a way, it might be as Chinese as the World Bank is American. We've not seen any OBOR project specifically funded by AIIB," Garg said, but adding quickly that New Delhi has an issue with the OBOR.
"The AIIB is a multilateral development bank. It is as much an Indian bank as it is a Chinese or British bank," AIIB vice-president and corporate secretary Danny Alexander told reporters.
He further said no project will be financed unless it meets the laid-down principles, which are created by all AIIB member-countries and the approval of the board is necessary for any funding.
When asked specifically if the AIIB is sympathetic to Indian concerns over the CPEC, he said, "our bank is apolitical. We don't comment on the internal affairs of any member-country, be it India or anybody else. What drives our investments is projects, and not politics."
One Belt, One Road (OBOR) is a USD 4 trillion Chinese initiative aimed at developing integrated trade corridors across Asia, Europe, Africa and the Middle East. The initiative will see China expand domestic and overseas investment in transport, as well as the associated energy, power and industrial infrastructure required to strengthen trade links.