India Noncommittal on the Partnership for Global Infrastructure and Investment

The G-7 countries that met a month ago for the Leaders’ Summit in Germany formally launched the Partnership for Global Infrastructure and Investment (PGII). The PGII is an infrastructure initiative to finance connectivity projects in developing countries and is seen as a counterpoint to China’s Belt and Road Initiative (BRI). The President of the United States, Joe Biden, in a tweet said, “Collectively, we aim to mobilize nearly $600 billion from the G7 by 2027 to invest in critical infrastructure that improves lives and delivers real gains for all our people.” Biden additional that the focus of the PGII will be in four key areas: health and health security, digital connectivity, gender equality and equity, and climate and energy security.

India, which was present at the G-7 meeting, had a rather lukewarm response to the new initiative. Indian Foreign Minister Vinay Kwatra said that India would respond once it had reviewed the details of the initiative. Speaking to the media on issues related to the infrastructure initiatives of the G-7, the foreign minister also fixed that Prime Minister Narendra Modi’s “remarks in both plenary sessions focused on this part, which is the sustainable solution and lifestyle for the environment.” He clarified that PGII is a “separate G7 initiative” and “not the G7 outreach initiative.”

India’s position is puzzling because given its economic circumstances, India’s best option is to join with other like-minded partners in offering alternatives to developing countries in need of infrastructure and connectivity.

India has opposed the Chinese BRI, as have many Western countries, due to issues such as a lack of transparency and fair processes, as well as the economic infeasibility of several of the BRI projects, which critics say have driven states into a “department”. cheating situation”. India has asked many countries to be wary of undertaking such projects. But without offering a viable alternative, these countries are unlikely to pass on China’s offers. The PGII is running as a collective alternative, but India’s apprehension seems to be because the PGII is, at this stage, just a G7 initiative (India is not in the G7 but regularly participates as an observer). However, India could support the company in an effort to minimize the role of China’s BRI in infrastructure development and connectivity efforts around the world.

Even though India has remained somewhat evasive about the PGII, according to the White House fact sheet, there are investments directed to India. The US International Development Finance Corporation (DFC) will invest up to $30 million in the Omnivore Agritech and Climate Sustainability Fund 3, a venture capital fund that makes investments in the areas of agriculture, climate and food security. According to the fact sheet, the Fund plans to make investments in companies that improve food security, as well as greater climate resilience and climate adaptation in India, while strengthening the profit generation and agricultural productivity of small farms. In fact, this is the second time that DFC has made an investment proposal in India. DFC had financed in 2021 the US-based solar manufacturing company, first solar, with $500 million in debt financing to help its solar photovoltaic module manufacturing plant in Tamil Nadu, southern India. This facility, with an annual capacity of 3.3 GW, will be operational in 2023.

Do you enjoy this article? Click here to subscribe and get full access. Only $5 a month.

The PGII is not a new initiative, but rather a reworked version of Build Back Better World (B3W), launched by the White House in June 2021. B3W was conceived as an initiative to address the huge infrastructure requirements among low- and middle-income countries. B3W failed, but given the demand for quality infrastructure, the PG II, according to a White House memo on the new initiative, was launched with the goal of being open, transparent and accountable with performance metrics tied to tracking investments and timelines, while ensuring high standards. PGII plans to raise funds from the private sector both in the United States and in partner countries, as well as work with international financial institutions to generate the necessary resources. Furthermore, the PGII seeks to engage and “align the G7 and other like-minded partners to coordinate our respective approaches, investment criteria, expertise, and infrastructure resources to promote a common vision and better meet the needs of low- and middle-income people.” . countries and regions”. This opens up opportunities for countries like India to get involved in the PGII.

India could offer its expertise in some of the main focus areas for the PGII. As mentioned above, key areas include climate and energy security, digital connectivity, health and health security, and gender equality and equity. Digital connectivity could be one such area where India can make significant contributions by transporting its experience and expertise. While India has been in the process of digitizing many government services, the COVID-19 pandemic prompted the digitization of many sectors, including the electronic payments sector. Digitization has become a central piece to guarantee economic well-being and competitiveness. from india innovations in the fintech sector — including through measures such as the Unified Payments Interface (UPI), a real-time mobile payments system indigenously developed by India; and India Stack, which brings together NPCI’s digital payment projects for digital payments and Aadhaar’s identity and authentication prowess through APIs, can be replicated in several developing countries. Therefore, there are ways and means for India to be a part of PGII and offer opportunities and solutions to a large number of countries in the developing world. India, as a developing country, developing such solutions, can be an inspirational story for many.

China’s response to PGII was as expected. The Ministry of Foreign Affairs of China I call the Chinese BRI’s Western narrative is “false” and said connectivity projects should not be “to advance geopolitical calculus.” Instead, the ministry said, “the world wants to see real investments and projects that really pay off for people.”

India, along with groupings like the G-7, can effectively counter China through initiatives like the PGII. But there is a catch: PGII and such initiatives involve multiple countries, as well as private sector involvement from participating countries, which means that getting a coherent and coordinated approach to make it work will be much more challenging than China. LBRI.

Source link

Leave a Reply

Your email address will not be published.