China: Indian and Chinese delegations failed to arrive at a consensus that the five emerging economies should formally support the BRI

India and China are working together to find common ground ahead of the summit in September of the BRICS (Brazil, Russia, India, China and South Africa) grouping, despite their differences over docking the Beijing-led Belt and Road Initiative (BRI) with the alliance in the future.

At a conference of political parties, think tanks and civil society groups of BRICS held in Fuzhou, The Hindu has learnt, the Indian and Chinese delegations failed to arrive at a consensus that the five emerging economies should formally support the BRI.

The Fuzhou meet, organised by the Communist Party of China (CPC), is widely seen as an important component in framing the outcome of the BRICS summit that will be held in the Chinese coastal city of Xiamen in September.

The differences between the two delegations became evident when the text of the Fuzhou Initiative—an open document released at the end of the conference - was changed, on the insistence of the Indian delegation. Paragraph 14 of the first version of the Fuzhou Initiative had commended “the Belt and Road Initiative proposed by China”, for its “great significance for achieving development in developing countries…” However, since a consensus could not be achieved, the entire paragraph was dropped in the final version of the document, which was finally adopted at the conference.

A source privy to closed door deliberations, which resulted in recommendations for the BRICS summit as a separate “outcome” document, said that the Indian side, nevertheless, expressed its willingness to support individual connectivity projects, provided they were not tied up with the BRI.

India had boycotted last month’s Belt and Road Forum, hosted by China for promoting the BRI. But in an interview with The Hindu, BJP general secretary Ram Madhav said India’s decision was driven by “certain sovereignty related questions”, and should be treated as an “exception”, within the overall growth of India-China ties in the last three years.

The two delegations at Fuzhou also differed on establishing a permanent “Friends of BRICS” forum, which would include other countries outside the five emerging economies.

The source said, “All member-countries have an outreach programme. For instance, India at the last summit invited countries belonging to BIMSTEC. Under the outreach programme, we can give loans to everyone. The Chinese side during the Fuzhou conference has invited Laos, Philippines and Cambodia. That is fine. But embedding countries into the BRICS arrangement on a permanent basis, which might include Pakistan, through the Friends of BRICS club was not found acceptable.”

At a press conference in March, Chinese Foreign Minister Wang Yi proposed establishing a BRICS-plus arrangement, involving other countries with the grouping.

However, there was greater convergence among the delegates on other issues, including establishment of a BRICS financial institute, back up the existing contingency reserve arrangement of the New Development Bank of the emerging economies. “There is a suggestion to set up an institution on the lines of the IMF. It is not a bad idea but the location of the headquarters of such an institution is yet to be decided,” the source said.

India is keen on establishing a BRICS credit rating agency, while, so far, the Chinese have been focusing more on improving the methodology of the existing credit rating agencies. “But this might change after Moody’s downgraded China’s credit rating,” the source observed.

In his his opening remarks at the conference, Samir Saran, vice president of the New Delhi-based Observer Research Foundation (ORF) and leader of the visiting Indian delegation, proposed that the forthcoming Chinese Presidency of the BRICS must pursue the institution-building project, proposed by India in 2016, which included setting up research institutions, rating agencies and other bodies that promoted intra-BRICS cooperation.

Cyber security is likely to emerge as another important topic in the Xiamen summit. India, on its part, is keen on promoting digital economy, and is likely to back the existing working group on Information and Communication Technology (ICT), to comprehensively examine all aspects of cyber security.