China is increasingly using its financial clout to outmanoeuvre the western world. Beijing’s Belt and Road Initiative (BRI) is spreading across the world and has caught the western world off-guard. It has been trapping low-income countries into unaffordable debts to be part of its trillion-dollar BRI push, which is seen as expanding Beijing’s trade power with Africa, Asia and Europe. Pakistan and Sri Lanka are the shining examples of Chinese entrapment. For India, the BRI initiative poses a serious threat. Neighbours like Nepal and Sri Lanka have been leaning towards China after receiving aid from the communist country. It is in this context that the decision of the Group of Seven (G7) countries during its recently concluded summit to unveil a $600-billion infrastructure fund can play an important role to counter China.
It is a timely and necessary initiative, widely seen as the West’s response to China’s Belt and Road Initiative. The new fund will help developing countries tackle climate change. The decision was announced in the midst of deliberations at the summit held in Germany’s Bavarian Alps. Prime Minister Narendra Modi represented India as a special invitee as part of efforts to expand the engagement in the Asia Pacific region. In an increasingly uncertain world, exacerbated by the war in Ukraine, these meetings may set the contours of what a rules-based order may look like in the years to come. Hopefully India will stand to gain from the G7 infrastructure fund as it will focus on climate initiatives, including promotion of regional energy trade in Southeast Asia. Further, it will definitely help to counter the growing Chinese influence in the developing world.