What is the proposed Agritech and Climate Sustainability Fund? Will India get enough money for infrastructure development?
What is the proposed Agritech and Climate Sustainability Fund? Will India get enough money for infrastructure development?
the story So Far: On 26 June, the G-7 grouping of the world’s “most industrialized countries” – Canada, France, Germany, Italy, Japan, the UK and the US – launched a US-led country along with the European Union. $600 billion Partnership for Global Infrastructure and Investment (PGII) At their summit in Schloss Elmau, Germany, where India was among the five special invitees. The initiative is described as a “value-driven, high-impact, and transparent infrastructure partnership to meet the vast infrastructure needs of low- and middle-income countries and support the economic and national security interests of the United States and its allies.” was billed for.” The officials also clarified that PGII will offer a counter to China’s Belt and Road Initiative (BRI) Worldwide for projects that were formally launched five years ago.
What was India’s reaction?
Foreign Secretary Vinay Kwatra said that a day after the announcement of PGII by US President Joseph Biden. “I feel [PGII]… there is a separate G-7 initiative and I remember, unless there is some other input, I think it is not a G-7 outreach initiative,” adding, “We will have to see the details of it.” Be able to speak specifically on its elements.”
Why is feedback important?
First, Mr. Kwatra’s response indicates that India was not secretive to the PGII consultations, nor was the infrastructure plan part of the documents signed by India, Indonesia, South Africa, Senegal and Argentina, which were part of the “G-” . 7 Outreach” Summit. (The European Union has participated in the G-7 as a “non-numbered” member since 1981).
The difference is interesting because just a month ago, at the Quad Summit in Tokyo, Prime Minister Narendra Modi participated in the launch of the US-led “Indo-Pacific Economic Initiative” (IPEF) with similar sudden plans, and India had joined as one. “Initial” or founding partner countries.
It also came as a surprise that India did not support the PGII plan, as the US billed it as a rival to China’s BRI, with a permanent debt burden and greater sensitivity to environmental concerns. India has actively opposed the BRI because it ignored these reasons and for its “violation of territorial integrity”.
Is there a specific role for India?
According to US officials, PGII will have four key infrastructure priorities: climate and energy security, digital connectivity, health and health security, and gender equality and equity, all of which are priority areas for New Delhi as well. The PGII “factsheet” released by the White House also includes a specific plan for investment in agritech and the Climate Sustainability Fund that will “invest in companies that enhance food security and promote both climate resilience and climate adaptation in India , as well as improving it.” profitability and agricultural productivity of small-holding farms.” According to the documents, India’s fund will target a target capitalization of $65 million by September 2022 and $130 million in 2023. The US government’s International Development Finance Corporation (DFC) for the fund Will raise $30 million in private capital.
What could be some of the reasons for India’s austerity on PGII?
The Ministry of External Affairs has yet to elaborate on its initial response to the PGII, and it is quite possible that once its strategy is studied and verified, it will support it. One of the reasons for some skepticism in New Delhi is that the PGII is one of several US-led economic initiatives announced globally and in the Indo-Pacific, without much clarity on whether or not they will overlap with each other. will go together. At the Quad Summit, Mr. Biden committed to an infrastructure fund of $50 billion over five years. The announcement of the PGII for $600 billion over five years comes as a part of the US leading the G-7 initiative to counter China’s “strategic competition” and reduce the nearly $40 trillion “infrastructure gap” in the developing world. Years later.
Last year, the Biden administration also revived the Trump administration project for the “Blue Dot Network Initiative” to certify infrastructure projects, but withheld them from funding. Analysts say another reason for the Indian response could be to show consistency, given India’s previous response to the BRI, when it was first announced in 2013 by Xi Jinping ahead of its formal launch in 2013. “When China first unveiled the BRI, India’s initial reaction was also that it was a plan with geopolitical consequences on which India was not consulted. India said it had to study before responding. It is possible that the Modi government’s vigil on PGII is about striking a similar balance,” said Sanjay Baru, author, policy analyst and Distinguished Fellow at United Services Institution of India (USI).