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India takes loans from Asian Infrastructure Investment Bank, leftist media and Rahul Gandhi spin it to claim India borrowed from China amidst LAC standoff

India is second-largest shareholder of the Asian Infrastructure Investment Bank, a multilateral development bank with 103 member-nations, that aims to improve economic and social outcomes in Asia

Even as Indian armed forces engage in a tense standoff with the Chinese PLA army along the Line of Actual Control in India’s eastern Ladakh, there have been some individuals and left-leaning media organisations, who have used this crisis to undermine India’s stand against the expansionist Chinese designs, only to peddle their agenda against the Modi government.

The erstwhile Congress president Rahul Gandhi today posted a tweet, raising aspersions on the Modi government. The Gandhi scion tweeted that the Indian Government had taken huge loans from a China-based bank amidst the border brawl between the two countries.

Earlier today, a report titled ‘China loan horse without a mouth‘ was published in ‘The Telegraph’ which said that India signed a loan agreement with the Asian Infrastructure Investment Bank for $750 million to support measures undertaken under the Pradhan Mantri Garib Kalyan Yojana(PMGKY). The report stated that India went on to take two loans worth $1,350 million from the bank in which Beijing is the majority shareholder amidst a simmering deadlock between the two armies at the LAC.

“On June 19, four days after the Galwan massacre in which China also suffered unspecified casualties, India signed the $750-million loan agreement with the AIIB to tide over the coronavirus crisis. It was also the day Prime Minister Modi had made the “no-intrusion” claim,” the innuendo-filled article published in Telegraph read, obliquely suggesting that the Indian government signed a loan agreement with China in the wake of Galwan valley clashes.

Similarly, it further read, “On May 8, at a time when the first reports of Chinese incursions at multiple points in eastern Ladakh had begun coming in and were largely ignored by the Indian government, another loan of $500 million had been taken from the AIIB to fight the pandemic back home.”

The article called into question Indian government’s policy of banning Chinese applications in the wake of the border tensions while simultaneously seeking loans from a bank headquartered in Beijing.

Asian Infrastructure Investment Bank, a multilateral bank with more than 100 members

While Rahul Gandhi alluded that the Indian government took loans from a China-based bank during the ongoing LAC standoff, what he conveniently failed to mention is that the bank in question, Asian Infrastructure Investment Bank, though based out of China, is a multilateral bank with more than 100 members.

The bank was established with the aim of improving social and economic outcomes in Asia and regions beyond. It started its operation from January 2016 and has more than 103 members. Though China is the majority shareholder of the bank with 26. 61 per cent voting shares, India is the second-largest shareholder with 7.6 per cent voting shares. Like any other multi-nation institution, AIIB is one such organisation to help its member countries overcome the daunting challenges of infrastructure development.

However, such nuances were lost or deliberately ignored by Rahul Gandhi when he alleged that India had sought heavy loans from a ‘China-based’ bank. Since India is a part of the organisation and holds sizeable voting shares, it is well within its rights, legally and morally, to obtain loans to address its financial needs.

On the other hand, the Telegraph, despite including the nature and details of the Asian Infrastructure Investment Bank, along with India’s shareholding in the institution in the article, did not shy away from casting doubts on the central government’s wisdom to sign loans from the bank based out of China.

The organisation, Asian Infrastructure Investment Bank, was built with the express desire of helping the member countries for their infrastructural development projects, but, the Telegraph dishonestly implied that India borrowed from a Chinese bank even as its armed forces are involved in a tense deadlock along the LAC.

Far from what the Telegraph and Rahul Gandhi alluded, AIIB is not a commercial Chinese bank. It is a multilateral institution. The fact that its headquarters is in Beijing does not make it a Chinese bank. In addition to this, India’s finance minister sits on the board of governors of the AIIB. In other multilateral organisations such as BRICS Bank or the New Development Bank, India’s finance minister is on the board of the governors.

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OpIndia Staff
Staff reporter at OpIndia

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