India and the World Bank Group discussed taking their partnership beyond traditional lending. Now the focus of both will be on infrastructure finance, digital public infrastructure, tourism and raising private capital.
Finance Minister Nirmala Sitharaman meets World Bank Group President Ajay Banga in Asheville on the sidelines of the G20 Finance Ministers and Central Bank Governors meeting. This information was given in the statement issued after the meeting.
According to the statement, Finance Minister Sitharaman welcomed the World Bank Group’s continued engagement with India. He expressed gratitude for the speedy processing of development policy financing worth $1.5 billion.
The Finance Minister also welcomed the support the International Finance Corporation (IFC) has provided to the MSME sector through the Small Industries Development Bank of India (SIDBI). The statement said that this assistance was processed in record time and has had a positive impact on India’s MSME sector.
Strengthening the India-World Bank Group partnership and greater use of financing tools were discussed in the meeting. Both the leaders talked about the major role of Multilateral Investment Guarantee Agency (MIGA) in India. Under this proposed collaboration, the country’s corporate, infrastructure and municipal bond markets will be strengthened through systematic use of guarantees and raising more private capital.
He also considered a sector-based, programmatic approach to infrastructure. With such an arrangement, the focus of partnership will shift from individual projects to programs of larger sectors.
Ajay Banga mentioned the major changes in India’s infrastructure. He also discussed opportunities for greater use of the World Bank Group’s instruments to support India’s development ambitions.
The talks also discussed enhancing MIGA’s engagement in India and the use of political risk insurance for Indian companies investing abroad.
Nirmala Sitharaman also mentioned India’s work in collaboration with the World Bank Group to create a Global Digital Public Infrastructure Knowledge Hub in India. Through this proposed hub, ways of using technology in many sectors including agriculture will be explored. The Finance Minister expressed hope that it will be launched soon.
Finance Minister Nirmala Sitharaman proposed to develop globally competitive tourism destinations under the new India-World Bank Group Country Partnership Framework. The initiative will be based on a coordinated model, combining policy and infrastructure support from the International Bank for Reconstruction and Development (IBRD), private sector investment from IFC, and guarantees from MIGA.
Both sides also talked about evolving this relationship from a traditional transaction to a strategic platform for mobilizing global knowledge, innovation and private capital, where India’s scale and capacity can be combined with the World Bank’s international expertise.
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