The country will need more than $4.5 trillion in investments over a decade to create infrastructure but the cost of such investments will be a challenge, Finance Minister Piyush Goyal said at the Asian Infrastructure Investment Bank’s (AIIB) annual meeting on Monday.
At the same time, the Minister added that finding funds required for such investments will not be a deterrent.
“Infrastructure creation requires $4.5 trillion in investments over the next 10 years,” Mr. Goyal said while speaking at the AIIB governor’s seminar on mobilising funds for infrastructure.
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Interest rates are rising globally as well as domestically, raising the cost of finance, Mr. Goyal said. India is the second-highest equity investor in AIIB and also the largest recipient of funds from the multilateral agency that started operations in January 2016. India has picked up 28%, or $ 1.4 billion of the AIIB’s total funding for seven projects.
Later at a press conference, the Finance Minister said the country is looking forward to investments in nine more projects with a funding of $2.4 billion from the Beijing-headquartered agency. “There is a good pipeline of projects that is under consideration with AIIB,” he said.
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On Sunday, AIIB approved an equity investment of $100 million in India’s National Investment and Infrastructure Fund’s (NIIF) and is considering a further investment of $100 million in the future.
When asked about India’s concern over AIIB’s funding in the China Pakistan Economic Corridor (CPEC) that passes through Pakistan-Occupied-Kashmir (PoK), Mr. Goyal said ‘one cannot dictate’ as to what projects a multilateral agency should invest in.
“These are independent organisations …not Chinese-led or American-led... it is always a multilateral institution,” he said.
Pointing out that India was the largest beneficiary of AIIB funds, he said those funds are deployed in both the public and the private sectors.
When asked if India is planning to make more investments in AIIB, economic affairs secretary S.C. Garg said at this point such investment was not required.