China’s plan to create an international financial institution to rival the IMF, the World Bank and the Asian Development Bank (ADB) has received a boost as Indian officials have indicated that they are planning to join as the second largest shareholder.Â
A number of sources within the Indian government have briefed journalists recently that they were minded to join. One told the Economic Times: "We are looking at it positively. In principle, the view is to join it." Another told the Wall Street Journal: "We need money, we also need to have a say in the institution. Going by this logic, we should be part of the new infrastructure bank."
China proposed the idea of an Asian Infrastructure Investment Bank (AIIB) in October last year, when it invited India to participate. The aim is to challenge the regional role of the ADB, a Manila-based multilateral lender founded in 1966 that is dominated by the US and Japan.
India may join as part of Prime Minister Narendra Modi’s "Act East" policy, which aims to increase co-operation in south Asia. It may also provide some of the multi-trillion dollars of investment that India needs to modernise its economy over the next 20 years.Â
Pakistan, Bangladesh and Sri Lanka are also expected to join the bank.
Last month China announced it would invest $300bn into India’s infrastructure.
