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India Taunts China At UN, Our Assistance Doesn’t Create Indebtedness – Free PDF Download



What has happened?

  • India last week told the UNSC that it has always strived to foster global solidarity across the world with its development partnership efforts,
  • Fully respecting national priorities and ensured that its assistance does not create “indebtedness“, in an apparent swipe at China.

Open debate at UNSC

  • Addressing the UN Security Council open debate on ‘Maintenance of International Peace and Security: Exclusion, Inequality and Conflict’ held under the current presidency of Mexico,
  • Minister of State for External Affairs Dr Rajkumar Ranjan Singh said whether it is with India’s neighbours under the “Neighbourhood First” policy or with African partners or with other developing countries,
  • “India has remained and will continue to be a source of strong support to help them build back better and stronger“.

  • “India has always strived to foster global solidarity across the world with our development partnership efforts fully respecting national priorities and
  • Ensuring that our assistance remains demand-driven, contributes to employment generation and capacity building and does not create indebtedness.
  • This is particularly true in countries in the post-conflict phase,“ Mr Singh said.
  • Mr Singh’s remarks appeared to be a thinly-veiled reference to China.

China’s debt trap

  • There have been global concerns over debt traps and regional hegemony by China using its ambitious BRI projects.
  • China is doling out huge sums of money for infrastructure projects in countries from Asia to Africa and Europe.
  • The Trump administration had been extremely critical of the BRI and had been of the view that China’s “predatory financing” is leaving smaller counties under huge debt endangering their sovereignty.

Covid pandemic

  • The Covid pandemic has pushed lower- and middle-income countries into crushing debts, mostly from financial institutions.
  • But China’s BRI has compounded the debt burden many times over with hidden loans worth $385bn, a new report 
  • As a result, many countries have to repay more money than they think.
  • These loans are structured in a way that is hidden from the World Bank.
  • After tracking over 13,000 projects worth $843bn across 165 countries, including $385bn in what it calls “hidden” debt,
  • Virginia-based research lab AidData revealed in a new report that actual debt levels in these countries are systematically hidden.
  • Chinese debts are systematically underreported to the World Bank’s Debtor Reporting System (DRS) by lending to private firms rather than government institutions.

  • The latest study shows lower- and middle-income countries are burdened with crushing hidden debts worth $385 bn.
  • According to the report, debt exposure of 44 countries has exceeded 10 per cent of their GDP.


  • BRI, which was supposed to deliver trillions of dollars in infrastructure financing to some countries in Asia, Africa and Europe, has now turned into a massive debt trap.
  • China has financed thousands of projects in over 100 countries, mainly in lower- and middle-income countries.
  • Now many of them are struggling to pay back the debt.

Q) Which of the following is not a correct statement with respect to Masala Bonds?

  1. It allows Indian companies to raise overseas debt
  2. Interest payment is in Indian rupee
  3. Most popular market for Masala Bond is New York
  4. All the statements are correct




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