India may offer loans to poor nations to develop infrastructure

“In 2010, India made one of its goals crystal-clear: the country wants a permanent seat on the UN Security Council. Ahead of a possible restructuring of the council, India has announced that it will loan and fund infrastructure projects in economically poor, resource-rich countries in Asia and Africa. The goal would be to strengthen international relations. India is already involved in capacity-building in many of these countries.”

Implications from IFTF:

While this may signal a positive for Indian in terms of their macroeconomics, it is important to realize that providing infrastructure loans to ‘resource-rich countries’ most likely implies that in return for the loans India requires access to these resources. Depending on how these exchanges are structured, this can be damaging to the loan recipients in the long-term.