According to a report in the Times of India on Nov. 16, the Indian government had kept a strict watch since the 5th of this month, after Li Yuanchao, Vice President of China met Banerjee, Chief Minister of West Bengal in Calcutta for fear the latter might be planning to get a soft loan from Asian Infrastructure Investment Bank established with China’s contribution.
Invited by Hamid Ansari, Vice President of the Republic of India and Rajya Sabha Chairman, Li Yuanchao paid an official visit to India from November 3 to 7. As reported in the Times of India, the talks during the 5 days visit had mentioned the plan of West Bengal borrowing from Asian Infrastructure Investment Bank. And the Indian central government was extremely concerned over this. At present, India has no explicit provisions for state governments to directly take overseas loans. In addition, as China had just replaced India and become the fuel supplier of Nepal, the Indian government feared that China would provide West Bengal with financial support while “interfering in the internal affairs of India”. The Times of India reported that ever since Banerjee became Chief Minister, West Bengal was in serious financial crisis. From 2010 to 2011, the amount borrowed by that state had reached 198.195 billion rupees (about RMB 19.1 billion). Before that Banerjee had requested the central government for many times to waive off the (yearly) interest repayments and rollover the loan. Some experts are worried that faced with such a dilemma, Banerjee might hold fast to China as a life-saving straw.
According to the report, the meeting between Banerjee and China also discussed the proposal of building a Bangladesh – China – India – Burma Economic Corridor, which will connect Calcutta and Kunming. However, India struggles with the fact that this economic corridor passes through “Arunachal Pradesh” (China’s southern Tibetan region). Indian officialdom was quite touchy on this sensitive matter.
According to the reporter from Global Times, presently the relationship between Banerjee and the Indian government is not so good. West Bengal might hold an election next year, and the Trinamool Congress founded by Banerjee is quite influential in the region. The ruling Bharatiya Janata Party, hoping to “make inroads” into this region, needs to defeat the Trinamool Congress. In order to achieve that goal, the Bharatiya Janata Party once tried to weaken Banerjee’s political influence by sweetening up some members from the Trinamool Congress, aggravating the conflicts between the two. As reported by Times of India, Banerjee was keen to set up local camps against “the Prime Minister” and was regarded by India’s Prime Minister Modi as a “pain in the neck”. So, China’s making contact with her also turned out to be more interesting.