Vineet R asked: What's the role of BRICS' New Development Bank? How effective has it been? Has India benefited from it?

Rajeesh Kumar replies: The New Development Bank (NDB) was established in 2014 to support infrastructure and sustainable development projects in emerging economies. BRICS nations took the significant step to foster cooperation and offer an alternative funding source for infrastructure projects. Since its inception, the NDB has supported nearly 100 projects across the globe, amounting to around USD 33 billion.

Furthermore, the NDB's Emergency Assistance Facility offered loans to member countries to combat COVID-19 and support economic recovery measures. These loans covered direct expenses related to the pandemic response and initiatives aiding economic revival. The NDB also introduced a Coronavirus Combating Bond and two COVID Response Bonds, totalling USD 3.5 billion, to aid global efforts in tackling the COVID-19 pandemic.

The NDB's effectiveness, however, has been impacted by relatively smaller lending volumes, slow project implementation, and governance issues, among others. The NDB also faces complex geopolitical challenges due to growing economic and strategic competition.

As a founding member, India has benefited from NDB initiatives, mainly in the renewable energy and infrastructure sectors. The bank's focus on sustainable development aligns well with India's objectives of promoting clean energy and infrastructure. Since 2016, the NDB has approved approximately USD 7.2 billion for 21 projects in India. These projects encompass various areas, including infrastructure, renewable energy, transportation, and other sustainable initiatives.

Posted on July 19, 2023

Views expressed are of the expert and do not necessarily reflect the views of the Manohar Parrikar IDSA or the Government of India.