Beijing-backed AIIB Approves USD$750 Million COVID-19 Loan to India Amidst Border Fracas

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The Asian Infrastructure Investment Bank (AIIB) has given the green light to a USD$750 million loan to India to help mitigate the adverse impacts of the COVID-19 pandemic, just following an outbreak of violence on the Himalayan border between China and India.

The move brings total sovereign loans approved by the Beijing-based AIIB for India to USD$3.06 billion, including a recent $500 million loan for COVID-19 emergency response measures.

The loan ar­rives just fol­low­ing Hi­malayan bor­der clashes on 15 June which re­port­edly re­sulted in the deaths of dozens of In­dian and Chi­nese sol­diers. 

The clashes prompted Chi­nese and In­dian for­eign min­is­ters to speak by tele­phone on 17 June to ease ten­sions, with an In­dian spokesper­son sub­se­quently stat­ing that “nei­ther side would take any ac­tion to es­ca­late mat­ters.” 

The AIIB is a mul­ti­lat­eral de­vel­op­ment bank that was es­tab­lished at Bei­jing’s be­hest with the goal of fund­ing in­fra­struc­ture de­vel­op­ment across the Asia-Pa­cific.

The bank com­menced op­er­a­tion on 16 Jan­u­ary 2016 with cap­i­tal of $100 bil­lion, equal to half that of the World Bank.

By January 2018 India has become the AIIB’s biggest borrower, with lend­ing to In­dia reaching USD$1.074 bil­lion, equal to nearly 28% of all credit ex­tended at the time.

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