In recent years, India has increasingly given out tens of billions of dollars in loans to nearby nations, creating a counterweight to the communist regime’s Belt and Road Initiative (BRI) projects proliferation in south Asia and the Indian Ocean region.
According to a recent Financial Times report, since Indian Prime Minister Narendra Modi took office in 2014, New Delhi’s lines of credit offered to other countries reached $32.5 billion, a threefold increase from the previous 8-year period.
Data from the state-backed RIS research firm shows that India’s cumulative loans since its independence in 1947 spiked from $55 billion to as much as $107 billion, indicating a nearly 100% surge since 2014.
The outlet, citing the American Enterprise Institute think-tank, noted that the amount is way lower than that of Beijing’s BRI, which logged $838 billion in 2021 since it started in 2013.
However, the Indian foreign ministry has extended over 300 lines of credit for roughly 600 projects ranging from a cement plant in Djibouti to the Maldivian bridge.
Moreover, New Delhi has also financed everything from training courses to renovating international cultural spots, including mosques and temples.
The country’s lawmakers believe that countering the BRI is critical to prevent being encircled by neighboring pro-Chinese countries. Their infrastructures would likely assist the communist regime in achieving its military goals.
Financial Times also pointed out that New Delhi’s development finance conflicts with Beijing’s lending methods which India describes as “predatory.”
Brad Parks, executive director at research lab AidData, disclosed that India’s ExIm Bank loans usually offer more concessional terms than Chinese credits.
In contrast to China’s ExIm Bank, the country also chooses builders through a “competitive bidding process, provided the proceeds purchase Indian goods and services.”
New Delhi thinks these plans create “jobs, demand for material and machinery in India and also a lot of goodwill.”
Regarding the case of Sri Lanka, the first Asia-Pacific nation that declared bankruptcy in May, the Indian government reached out with nearly $4 billion in loans and donations for supplies of fuel, medicine, and other food.
On the contrary, the communist regime offered around $1.2 billion in food and financial support while previously refusing to extend Sri Lanka’s debts of about $7 billion.
Critics revealed that BRI’s lending for building massive and unused projects in Sri Lanka worsened its debt crisis. Among them, the CCP offered to forgive debts for the nation in exchange for 99 years of rights to operate in the southern port of Hambantota.
In addition, an analysis this month conducted by Johns Hopkins found that New Delhi’s loan interest rate to Sri Lanka was only around 1% last year, lower than Chinese loans at 3.2%.
Earlier this year, during the launch of housing and solar power projects in Mauritius, Modi said Indian lending is “based on the needs and priorities of our partners and respects their sovereignty.”
Modi has also slammed Beijing’s attempts to develop colonial “dependence partnerships.”
Prabhat Kumar, an Indian foreign ministry official who manages development partnerships, said, “We’d like to see our neighbors prosper. South-south cooperation is a big part of our foreign policy.”
He added, “The global south matters to us, and we’ve been doing this for a long time. It’s not reactive.”
As Financial Times reports, India’s development finance does not come from the government alone but also from the economic firepower of dominant domestic private corporations.
Over the last few years, Indian firms such as Tata, Larsen & Toubro, and the GMR Group, have developed significant business overseas.
The leading player is the Adani group, owned by the world’s third-richest tycoon Gautam Adani. The company has developed power and infrastructure projects from Myanmar to Sri Lanka.
Due to a years-long connection with Modi, the Adani group has grown into one of the most powerful Indian companies in South Asia.
Last month, the group started construction of a new $700 million terminal at Sri Lanka’s Colombo port.
It has also received contracts for two energy projects on the island and jointly purchased a concession for Israel’s second-biggest port.
The Indian multinational conglomerate plans to invest in Tanzania and will start supplying electricity to its neighbor Bangladesh next month.
Adani told the outlet, “We don’t do the role of a country. We are an Indian company, and wherever our country’s interest is there, we always feel there is nothing wrong to help India, to help neighbors.”
Currently, India is financing in credit and grants the $500 million “Greater Malé Connectivity” Project. This is a 7 km bridge connecting the capital of the Maldives to several other nearby islands, built by the country’s traditional Shapoorji Pallonji Group conglomerate.