The sixth summit of the BRICS leaders was hosted on 15-16 July in Brazil. Among the main issues discussed at the summit were: the development of the political and economic situation in the world; further development of practical cooperation between members of the organization; cooperation in the energy field.
One of the key issues was signing of the Agreement on the establishment of the BRICS -New Development Bank (in counterbalance to Western financial institutions), with an initial statutory fund of $50 billion and with the headquarters in Shanghai in order to provide financial support for infrastructure projects in the BRICS states. It is planned to increase the bank capital up to $100 billion.Since 2016 the Bank will start to invite new members(except NATO member countries) to make contributions(minimum $100 thousand), but the share capital of the BRICS states can not be less than55%.
It is noteworthy that the main financial contributor to the new bank will be China and it is the only one, who has the right to veto financing of infrastructure projects by the BRICS Bank.
India is the most interested in the development and stable functioning of the BRICS Bank, as it plans to use the capital for infrastructure development of the country.On the other hand, China will never let pass such a financing and are more likely will put a veto on it. Chinese and Indian markets are the most ambitious in the world and China will not stimulate the development of its regional rival. Only in case of India to give up its territorial claims for McMahon line denounced by China in 1959.
China may also ask India to abandon its ambitions in Southeast Asia, namely in the ASEAN countries in exchange for funding, as well as Indian support to China in international organizations(eg the UN).
Is it worth to sacrifice India’s national interests, while China decidesits geopolitical plans, implementing them by way of financial pressure on the BRICS states.