India ranks 119 on Global Business Resilience Index

On the economic parameter, which takes into account GDP, political risk and oil intensity, India is ranked 115, the same as last year

India ranked 119th among 130 countries on an index measuring business resilience of nations based on economic,risk quality and supply chain factors, dropped seven notches from last year.

The 2015 FM Global Resilience Index has been topped by Norway for being the country best suited for companies seeking to avoid disruptions in their global supply chain operations. Venezuela is ranked last on the list.

On the economic parameter, which takes into account gross domestic product, political risk and oil intensity, India is ranked 115th, the same as last year. In the risk quality factor, it ranked 109th for its quality of natural hazard and fire risk management, a slight improvement from its 113th rank in 2014. In the third category of supply chain, which looks at corruption control, infrastructure and local supplier quality, India is ranked 89th, falling 11 spots from the previous year.

“Economically, (India) suffers from a formidable tangle of problems. A third of its population still live in extreme poverty — one of the highest incidences outside sub-Saharan Africa. The implementation of economic reforms has been identified as a priority by India’s new government," the report said adding that India ranks poorly across eight of the nine drivers of resilience.

"The exception is the country's relatively low exposure to natural hazards, which suggests that India's destiny, to an encouraging extent, lies in its own hands," it said.

Among the top 10 countries that are most resilient, Norway is followed by Switzerland (2), Netherlands (3), Ireland (4), Luxembourg (5), Germany (6), Qatar (7), Canada (8), Finland (9) and the US (10). At the 123rd spot, Pakistan is in the bottom 10 countries on the index.

The other least resilient nations to business supply chain disruption are Dominican Republic (126), Nicaragua (127) and Kyrgyz Republic (129).

Ukraine fell 31 places in this year's index to 107th, the biggest year-over-year fall in the rankings, owing directly to Russian military intervention there.

This worsening political risk and a weakened infrastructure are the main negative factors affecting the rank of Europe's largest country, the report said.

"Business leaders who don't evaluate countries and supply chain resilience can suffer long-term consequences," FM Global executive vice president for operations Bret Ahnell said.

"If your supply chain fails, it can be difficult or impossible to get your market share, revenue and reputation back," he said.

France, ranked 19, trails Germany at 6, the leading EU nation.

France has slid down the index in recent years, reflecting a rising risk of terrorism, evidenced tragically in Paris, and deteriorating perceptions of both infrastructure and local suppliers.

Also exposed to terrorism risk is the United Kingdom, which nevertheless held steady at 20 for the third year running, aided by its relative resistance to oil shocks.

The index provides an annual ranking of 130 countries and territories according to their business resilience to supply chain disruption.

The scores that generate the ranking are calculated as an equally-weighted composite of nine core drivers that affect resilience significantly and directly.

Simpler sops to help hit $900-bn export target

Multiple incentive schemes brought under two umbrellas as policy gets more in sync with WTO norms; greater focus on e-commerce; benefits to cover SEZsThe government on Wednesday unveiled a forward-looking and contemporary Foreign Trade Policy (FTP) for 2015-2020, seeking to strengthen merchandise and services exports with a targeted value of $900 billion by 2020.

In a drastic change of stance in keeping with global trading norms under the World Trade Organization (WTO), the new FTP sought to consolidate all previous export incentive schemes under two: Merchandise Exports From India Scheme (MEIS) and Services Exports From India Scheme (SEIS).

“The current WTO rules as well as those under negotiations envisage the eventual phasing out of export subsidies,” Nirmala Sitharaman, minister of state (independent charge) for commerce and industry, said while releasing the FTP. “Export-promotion measures have to move towards a more fundamental systemic measure rather than incentivising and depending on subsidies alone. There is, therefore, a need to ensure that our exports and services are internationally competitive. We must focus on quality and standards and produce zero-defect products. Brand India must be synonymous with reliability and quality,” she said.

The MEIS will be targeted for export of specified goods to specified markets and SEIS is meant for export of notified services in place of a plethora of schemes earlier.

The MEIS has replaced five existing schemes: Focus Products Scheme, Market-linked Focus Products Scheme, Focus Market Scheme, Agriculture Infrastrucutre Incentive Scrips and Vishesh Krishi Grameen Udyog Yojana (VKGUY).

On the other hand, SEIS has replaced the existing Served From India Scheme (SFIS). The rates of rewards under MEIS will now range from 2 per cent to 5 per cent, from the 2-7 per cent range earlier. On the other hand, under SEIS these will be from 3 per cent to 5 per cent, from the 5-10 per cent range earlier, according to commerce secretary Rajeev Kher.

In a big relief for exporters, all scrips issued under MEIS and SEIS and the goods imported against these scrips will be fully transferable. This means that scrips issued under export from India schemes can now be used for payment of customs duty for import of goods, payment of excise duty on domestic procurement of inputs or goods, and payment of service tax.

The minister said, “We must now aim higher. India must assume a position of leadership in the international trade discourse.”

“Our biggest challenge is to address constraints not so much externally but internally such as infrastructure bottlenecks, high transaction costs, complex procedures and constraints in manufacturing. This policy is a framework for increasing export of goods and services as well as generation of employment in keeping with the vision of Make in India."

In an effort to push the domestic content requirement, measures have been adopted to encourage procurement of capital goods from indigenous manufacturers under the EPCG scheme by reducing specific export obligation to 75 per cent of the normal export obligation.

"The Agreement on Subsidies and the Countervailing Measures of the WTO envisages the eventual phasing out of export subsidies. In the case of India, some sectors may be affected and require rationalisation of support over a period of time. The phasing out and eventual elimination of agricultural subsidies is also one of the key elements of the Doha Development Agenda," underscored the FTP statement.

As far as the coverage of the 3 per cent interest subvention scheme is concerned, which was a long-pending demand of exporters, the government has said it is in the process of identifying the sectors to which the same will be given during the current financial year, for which the Budget has allocated Rs 1,625 crore.

"The Budget has allocated Rs 1,625 crore. It will be given to specific sectors at a rate of 3 per cent. We are yet to identify the sectors," commerce secretary Rajeev Kher told reporters.

The FTP also introduced a concept of import appraisal mechanism which will be done on a quarterly basis by the commerce department. In a view to boost exports from Special Economic Zones (SEZs) the government also expanded the benefits under MEIS and SEIS to the units located inside the tax-free zones. "It is now proposed to extend the Chapter 3 incentives (MEIS & SEIS) to units located in SEZs also," said director general of foreign trade (DGFT) Pravir Kumar.

On the issue of imposition of MAT and DDT, Sitharaman said the proposal to remove those was still lying with the finance ministry. Breaking away from tradition, the Modi-led government did away with annual revisions of the policy. The FTP from now on will have a mid-term review after two and a half years, except for exigencies. In an attempt to achieve greater policy coherence and mainstreaming of all export incentive schemes, the commerce department will now direct state governments to prepare their own export strategies based on the new FTP.

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SIGNIFICANT ANNOUNCEMENTS

• Merchandise Export from India Scheme (MEIS) and Service Exports from India Scheme (SEIS) launched. MEIS & SEIS incentives to be available to SEZs, too
• FTP to be aligned to Make in India, Digital India and Skills India initiatives
• Duty credit scrips to be freely transferable and usable for payment of custom duty, excise duty and service tax
• Trade facilitation and ease of doing business by way of online filing of documents and emphasis on paperless trade

WHAT THE GOVT IS LOOKING AT

• Employment creation in both manufacturing and services
• Zero-defect products with a focus on quality and standards
• A stable agriculture trade policy
• A focus on higher value-addition and technology infusion
• Investment in agriculture overseas to produce raw material for Indian industry
• Lower tariffs on inputs and raw materials
• Development of trade infrastructure and provision of production and export incentive documents

analysis

On Wednesday, the Union ministry of commerce released the new Foreign Trade Policy, or FTP, with the objective of boosting India's exports in the coming five years. Much was expected from it, because the government's stated intention to turn India into a manufacturing powerhouse cannot happen unless exports take off. And yet the numbers for exports since the government took office have not been encouraging. Clearly, a major push was needed.

Judged from that viewpoint, the new policy has announced several significant steps. The commerce ministry is to be congratulated for having worked to try and streamline several onerous procedures. For example, the introduction of two schemes (Merchandise Exports from India Scheme and Service Exports from India Scheme) to replace many other existing schemes will go a long way in making export promotion policy simpler and easier to navigate. The introduction of a simplified import duty exemption certificate for all exports under the two schemes is expected to further streamline the foreign trade policy regime, making incentives more transparent and non-discretionary. Now, the certificates, the value of which would be determined at two to five per cent of export earnings, can be freely traded, making it simpler for exporters without past performance acquire them for duty-free imports. Another similar simplification that is likely to be widely welcomed is the reduction in the specific export obligation under the Export Promotion Capital Goods, or EPCG, scheme. In this scheme, exporters are allowed to import capital goods without duty, subject to their fulfilling an export obligation equivalent to 90 per cent of the total value of imports over a period of five years. Such export obligation has now been reduced to 75 per cent. Export obligations were hard to monitor; and compliance wasn't easy, either. The dilution suggests the government has recognised that. Another positive sign is that the revenue secretary was present for the unveiling of the foreign trade policy. This suggests that the government's claim that all proposals with fiscal implications have already been approved by the revenue department should be believed. This comes as a big relief: many schemes in the past have fallen prey to internal differences between Udyog Bhavan and North Block.

But, in the end, India needs to evolve beyond tax breaks for manufacturers. The only way to ensure that India becomes an export powerhouse is to slot it into global supply chains. This doesn't require tax breaks; it requires freer trade and a realistic exchange-rate policy - and, of course, better infrastructure. The government at least recognises the need for infrastructure; its push to improve road, rail and ports is worthy of approval. But export competitiveness also needs to have a rupee that is not overvalued by 24 per cent, when judged according to the real effective exchange rate. The government needs a bigger-picture take on what holds back Indian exports - it cannot rely only on tweaking the availability of export credits, and simplifying and rationalising export promotion schemes. These schemes have not failed just because they are complex. They have failed because Indian exports are not competitive. To force competitiveness on Indian companies, freer trade is a must - which means the free-trade agreement with the European Union, for example, should not be on the back-burner. And a more realistic exchange-rate policy that reflects the rupee's strength is essential. Until those constraints are tackled, it is debatable if the policy, whatever its many positive features, will be able to achieve its goal of promoting exports.

Faster Adoption and Manufacturing of Hybrid and Electric vehicles (#FAME) –

Union Government on 1 April 2015 launched Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME) – India Scheme. The scheme was launched as part of the National Mission for Electric Mobility to boost eco-friendly vehicles sales in the country. Facts about FAME India scheme Objective- to support the hybrid or electric vehicles market development and its manufacturing eco-system in the country in order to achieve self-sustenance in stipulated period. The overall scheme is proposed to be implemented over a period next 6 years i.e. till 2020. It envisages providing Rs 795 crore support till 2020 for the manufacturing and sale of electric and hybrid vehicles. It also seeks to provide demand incentives to electric and hybrid vehicles from two-wheeler to buses. Implementation- It will be implemented in phases. The Phase-1 will be implemented over a two year period in FY15-16 and FY16-17. Based on the outcome and experience from the Phase-1, it will be reviewed for implementation after 31 March 2017. Then appropriate fund will be allocated for future. Four focus areas of scheme- Technology development, Pilot Projects, Demand Creation and Charging Infrastructure. In the first two years Rs 260 crore and Rs 535 crore will be spent on the focus areas.

#PradhanMantri #KaushalVikas Yojana--- A New Direction Towards Empowerment of Youth

Skill and knowledge are the two driving forces of economic growth and social development for any country. Countries with higher level of skills fare better to cope with the challenges of emerging economies in the present day world.

            In any country, youth is primarily the focus for any program for skill development. Our country is better placed in this regard. We have a vast majority of population in the productive age group. This provides a great opportunity to India. It also poses a great challenge. Benefits will flow to our economy only if our  population, particularly the youth, is healthy, educated and properly skilled.

            India with its an unrivalled youth demographic, is definitely poised for a big boost in terms of socio-economic development.  We have 605 million people below the age of 25. They can act as agents of change, by being empowered with various employable skills which will enable them to make impact not only on their livesbut also on the lives of other individuals.

The recently approved Pradhan Mantri Kaushal Vikas Yojana (PMKVY), is a flagship scheme for imparting skill training to youth, focussing on improved curricula, better pedagogy and  trained instructors. The training includes soft skills, personal grooming, behavioural change et al.

           The scheme is being implemented by the newly created Ministry of Skill Development and Entrepreneurship through the National Skill Development Corporation (NSDC). It will cover 24 lakh youths. The Skill training would be based on the National Skill Qualification Framework (NSQF) and industry led standards. Under the scheme, a monetary reward is given to trainees on assessment and certification by third party assessment bodies. The average monetary reward is around Rs.8,000 per trainee.

            The skill training will be on the basis of demand assessed by the recently conducted skill gap studies by the NSDC for the period 2013-17. The central and state governments, industry and business houses will  be consulted for assessment of further demands. For this, a demand aggregator platform is also being launched. The target for skill development  will also take into account the  demands from various other flagship programs launched in recent times such as Make in India, Digital India, National Solar Mission and Swachh Bharat Abhiyan.

            The PMKVY, will primarily focus on the first time entrants to the labour market and target mainly drop outs from Class 10 and Class 12. The scheme will be implemented through NSDC training partners. At present, NSDC has 187 training partners in around 2,300 centres. In addition, central  and state government affiliated training providers are also to be roped in for imparting training under the scheme. All training providers will have to undergo a due diligence process, for being eligible under the scheme. Sector Skill Councils and the stategovernments are also to monitor skill training program under PMKVY.

            Under the scheme, a Skill Development Management System (SDMS), will be put in place to verify and record details of all training centres, quality of training and courses. Biometric system and video recording of the training process will also be ensured wherever possible. Trainees will also be required to give feedback which willbe the key element for the evaluation of the effectiveness of the PMKVY scheme. A robust grievance redressal system will also be made operational to address grievances. Further,an online citizen portal will be put in place to disseminate information about the program.

            Out of the total outlay of Rs.1120 crore, on skill training of 14 lakh youth, special emphasis is being given to recognition of prior learning. An amount of Rs.220 crore is being provided for this purpose. Rs.67 crore has been earmarked for awareness generation and youth mobilisation. Mobilisation of youth is to be done through Skill Melas at the local level with the help of state governments, municipal bodies, pachayati raj institutions and community based organisations. Another Rs.67 crore has been provided, under the scheme on mentorship support and placement facilitation. An allocation of Rs.150 crores has been made for training of the youth from the North-East region.

            Skill and entrepreneurship development is one of the high priority areas of the present Government. The newly formed Ministry of Skill and Entrepreneurship Development, is to play a critical role in fulfilling the objectives of the ‘Make in India’ campaign, a major initiative to turn India into a major manufacturing hub. The Ministry is to play a pivotal role in creating a skilled workforce to meet the demands of growing economy in different sectors including the manufacturing sector.

            A new National Policy for Skill and Entrepreneurship Development has also emerged to cover the entire gamut of initiatives in this direction. The Policy is to lay a roadmap for boosting growth creating quality  manpower. It has set a target for skilling 500 million persons by the year 2022.

            The efforts in this direction, is being carried on a mission mode. The National Skill Development Mission, an umbrella body, has three institutions under it. The National Council on Skill Development-under the chairmanship of Prime Minister, is to give policy direction and review skill development efforts. The National Skill Development Coordination Board, under the chairmanship of Vice Chairman NITI Aayog is to enumerate strategies to implement the decisions of PM’s council. The National Skill Development Corporation (NSDC), a non-profit company, is to meet the skill training requirements of the labour market including the unorganisedsector.                                                                                                                                  

            India has marked its presence as one of the fastest growing economies of the world. It is expected to rank amongst the world’s top three growth economies and amongst the top three manufacturing destinations by 2020. With the help of favourable demographic factors and sustained availability of quality workforce, our country is poised to make its imprint on global economy.

            The newly announced scheme, PMKVY, with its thrust on skill development to build human capital for future markets is sure to reap benefits for our economy. The new Policy and a Mission mode approach to deliver results will usher in a new era in the development of human resources and industry.

#ForeignTradePolicy 2015-2020 Unveiled

#ForeignTrade Policy 2015-2020 Unveiled

Two New Schemes – “Merchandise Exports From India Scheme” And “Services Exports From India Scheme” Introduced

  

The much awaited #ForeignTradePolicy 2015-20 was unveiled today by Minister of Commerce & Industry Mrs. Nirmala Sitharaman, at Vigyan Bhawan. The new five year Foreign Trade Policy, 2015-20 provides a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in keeping with the “Make in India” vision of Prime Minister.  The focus of the new policy is to support both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’.

   During her address Mrs. Sitharaman stated that there were various forces shaping India and its equation with the rest of the world.  She urged the Government and industry to work in tandem to deal with the challenges posed.

   The release of Foreign Trade Policy was also accompanied by a FTP Statement explaining the vision, goals and objectives underpinning India's Foreign Trade Policy, laying down a road map for India’s global trade engagement in the coming years.  The FTP Statement describes the market and product strategy and measures required for trade promotion, infrastructure development and overall enhancement of the trade eco system. It seeks to enable India to respond to the challenges of the external environment, keeping in step with a rapidly evolving international trading architecture and make trade a major contributor to the country’s economic growth and development.  She promised to have regular interactions with all stakeholders, including State Governments to achieve the national objectives.FTP2015-20. introduces two new schemes, namely “Merchandise Exports from India Scheme (MEIS)” for export of specified goods to specified markets and “Services Exports from India Scheme (SEIS)” for increasing exports of notified services, in place of a plethora of schemes earlier, with different conditions for eligibility and usage.  There would be no conditionality attached to any scrips issued under these schemes.  Duty credit scrips issued under MEIS and SEIS and the goods imported against these scrips are fully transferable. For grant of rewards under MEIS, the countries have been categorized into 3 Groups, whereas the rates of rewards under MEIS range from 2% to 5%. Under SEIS the selected Services would be rewarded at the rates of 3% and 5%.

Measures have been adopted to nudge procurement of capital goods from indigenous manufacturers under the EPCG scheme by reducing specific export obligation to 75% of the normal export obligation. This will promote the domestic capital goods manufacturing industry.  Such flexibilities will help exporters to develop their productive capacities for both local and global consumption.  Measures have been taken to give a boost to exports of defense and hi-tech items.  At the same time e-Commerce exports of handloom products, books/periodicals, leather footwear, toys and customized fashion garments through courier or foreign post office would also be able to get benefit of MEIS (for values upto 25,000 INR).  These measures would not only capitalize on India's strength in these areas and increase exports but also provide employment.

   Commerce Minister stated that although exports from SEZs had seen phenomenal growth, significantly higher than the overall export growth of the country, in recent times they had been facing several challenges.  In order to give a boost to exports from SEZs, government has now decided to extend benefits of both the reward schemes (MEIS and SEIS) to units located in SEZs.  It is hoped that this measure will give a new impetus to development and growth of SEZs in the country. 

   Trade facilitation and enhancing the ease of doing business are the other major focus areas in this new FTP. One of the major objective of new FTP  is  to move towards paperless working in 24x7 environment.  Recently, the government has reduced the number of mandatory documents required for exports and imports to three, which is comparable with international benchmarks.  Now, a facility has been created to upload documents in exporter/importer profile and the exporters will not be required to submit documents repeatedly.  Attention has also been paid to simplify various ‘Aayat Niryat’ Forms, Manufacturers, who are also status holders, will now be enabled to self certify their manufactured goods in phases, as originating from India with a view to qualifying for preferential treatment under various forms of bilateral and regional trade agreements.  This “Approved Exporter System” will help these manufacturer exporters considerably in getting fast access to international markets.

   A number of steps have been taken for encouraging manufacturing and exports under 100% EOU/EHTP/STPI/BTP Schemes.  The steps include a fast track clearance facility for these units, permitting them to share infrastructure facilities, permitting inter unit transfer of goods and services, permitting them to set up warehouses near the port of export and to use duty free equipment for training purposes.

   Considering the strategic significance of small and medium scale enterprise in the manufacturing sector and in employment generation, ‘MSME clusters’ 108 have been identified for focused interventions to boost exports. Accordingly, ‘Niryat Bandhu Scheme’ has been galvanized and repositioned to achieve the objectives of ‘Skill India’.  Outreach activities will be organized in a structured way at these clusters with the help of EPCs and other willing “Industry Partners” and “Knowledge Partners”. 

#Nano drone in your palm

The robust Skeye nano drone not only fits comfortably in one’s palm but is also easy to charge

Drones are a remarkable technological advancement. They are not only dead useful and are handy, and are built using the best approaches mankind has ever known. After Google launched its project drone, a chain reaction started and many other companies came up with their own designs of drones that provide a wide array of functionalities. Ranging from delivery services in hard to reach regions to spraying fields with pesticides to collect data aerially to formulate dynamically updated maps, these drones have proved that they are capable of doing almost any task.

One of the main objectives of building drones was to use the machines to spy and collect information that cannot be accessed easily. This is why it is essential that they have insignificant size so they become difficult to spot. Skeye nano drone fits this description perfectly.

When weather conditions are drastic and unfavourable, it is very difficult for these drones to stay up in the sky. Skeye nano drone is very robust. It can fly even in biting winter and in rain. But its small size makes it difficult to control it in windy situations. It is an easily pocketable drone as it measures only 1.57 square inches. Skeye nano drone is a quadcopter style drone. It has 4 perfectly balanced miniature rotators that keep it up. It looks like a child’s toy but this little hero is self sufficient. There is absolutely no quantifiable reason to underestimate its functionality.

This little flying box has a self stabilizing mechanism that helps maintain its balance and not get swayed by strong winds. Its gyros and accelerometer functionalities keep it steady. The implementation posed quite a difficulty to the developers. It provides sensitivity controls in three layers which in turn provide it with different piloting abilities to suit its flying under different conditions. It provides a basic mode for beginners who want to adjust their hands on this flying machine. The second mode is for advanced pilots and the last mode is for professionally trained drone veterans.

It is very simple to charge the drone. It has a slot which connects a USB charger to charge it. Customized charger is available with the packet itself. A charging round of about 30 minutes provides it enough power to stay in the air for an approximate of 7-8 minutes. Now, that is not too much, but because of its size, a constraint on the size of the battery was a major parameter.

It is available for an affordable price of $59. Now you will have to be very careful about your privacy for anyone can keep an eye on your house. It implements Ready To Fly technology (RTF) with 6 axis flight control system which makes it handy. It also has the ability of pulling off stunts smoothly with its aerobatic flip capability and LED light for flying in the night.

The new multilateral financial architecture

The announcement by Britain, France, Germany, Australia and Brazil to join the China-promoted Asian Infrastructure Investment Bank (#AIIB) has taken the world by surprise. AIIB, dismissed just months ago by western countries as another flamboyant plan by China, is now clearly accepted as a tangible game changer in the multilateral financial architecture.

What really reveals the scope and potential of AIIB, however, is Beijing's brilliant and calibrated March 29 vision for transnational economic corridors for Asia, inviting the world to participate in this ambitious web of cross-border physical, financial and business connectivity.

India, along with 45 other countries including Indonesia and Singapore, is a founder member of AIIB. AIIB's voting structure may be based on purchasing power parity and gross domestic product (GDP). If that happens, India will become the second-largest shareholder, and must aim to influence these institutions.

China's intended role for AIIB is not so different from the existing Western lenders like the World Bank (WB) and the International Monetary Fund (IMF), which have configured the system to suit their needs. In AIIB, China has replicated the formation and functioning of these institutions.

In formation,

• The IMF and WB were post-war efforts by the US to capitalise on a fiscally-weak Britain and extend control over the Sterling Area by internationalising trade rules (for example, reduction of tariffs) and foreign exchange rules (for example, no devaluation) while financing post-war economic growth. AIIB is a post-recession effort by China to capitalise on a fiscally-weak US and European Union, to limit US economic influence in Asia by internationalising infrastructure development.
   
• The AIIB focus on infrastructure is a masterstroke. Infrastructure is China's competency. The China Development Bank (CDB) already has 16 per cent committed abroad. By some estimates, CDB and China's Exim Bank, together provide more aid to Asia than the WB and Asian Development Bank, combined. In 2014, G20 leaders pledged to advance global GDP by 2 per cent, using infrastructure as a key instrument.
   
• As the US did, China wants to keep majority shareholding, so it can influence AIIB's course - an opportunity it did not get with the WB and IMF (both under 5 per cent) or the BRICS bank (equal 20 per cent). China is rumoured to be seeking a 50 per cent voting share of AIIB's initial capital of $50 billion.

China is leveraging legitimate concerns. Developing countries are frustrated with the Western institutions' unfair standards, ineffective aid policies and interference in local policy-making. The pressure on South Korea and Indonesia to open their domestic economies to foreign investment, in return for financial assistance during the 1997 Asian crisis, has not been forgotten.

There's also China's strategic interest looking for multilateral legitimacy and funding. Global participation in China-led projects, it hopes, will dilute its reputation in parts of Africa and Asia of an abrasive and transactional foreign aid policy.

In functioning,

• The vision for AIIB and China's infrastructure projects like the Maritime Silk Road, Silk Road Economic Belt, and Pakistan-China Economic Corridor, coincide. This is how the US uses IMF multilateral funding for projects in Ukraine, Iraq and Afghanistan.
   
• The World Bank and IMF co-opted countries. China will go beyond, to co-opt long-term investors such as pension funds, sovereign wealth funds and insurance companies, which have $50 trillion in capital. China will invest its own $3-trillion reserves in projects promising higher returns than US Treasury Bills. The US has done that successfully for decades by recycling petro dollars into developing countries.
   
• AIIB will be a platform for renminbi internationalisation, just as the IMF and WB were for dollar internationalisation. It can then raise and extend loans in renminbi on a large scale, an experiment that CDB has already undertaken.

The formidable intentions of AIIB and the new transnational corridors project are both a challenge and an opportunity for India.

If AIIB takes equity stakes in transnational infrastructure projects, it has geopolitical implications. Islamabad awarding management control of its Gwadar Port to China in 2013, created a stir in India and the West. Imagine China's clout within India if AIIB owns or manages India-located projects such as the Bangladesh-China-Myanmar-India corridor, and the many internal industrial corridors that Prime Minister Narendra Modi has planned with foreign funding.

The opportunity for India then, is to influence and partner both AIIB and the nascent BRICS bank on favourable terms. Infrastructure is the focus of BRICS bank too, but so is sustainable development. Developing countries, including India, can seek financing for climate change technologies, environment protection, affordable drugs and other technology-based public service delivery solutions. This will leverage India's IT prowess and Brazil's sustainable development experience. The first president of the BRICS bank from India should set this course.

India is at a critical juncture. It is one of the largest recipients of WB aid, loans that can be cannibalised as these new institutions emerge, so it must capitalise on its early placement in the new multilateral financial architecture. Else, as the experience with the United Nations Security Council, Association of Southeast Asian Nations, Asia-Pacific Economic Cooperation and Shanghai Cooperation Organisation shows, a missed opportunity in the beginning will take years to make up - if ever.