The selection of Shanghai as the headquarters for the BRICS Development Bank could hurt Indian Prime Minister Narendra Modi's domestic ratings, according to one expert.
Modi "has been outmaneuvered," Aditi Phadnis, South Asia advisor at Teneo Intelligence said in a note. "With Shanghai rather than Mumbai as the headquarters for the new BRICS (Brazil, Russia, India, China and South Africa) bank, Modi will have to return home empty-handed."
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At a summit in Brazil this week, BRICS leaders agreed to create a development bank and currency reserve that will be capitalized at $100 billion. The new bank will be modeled after the World Bank and International Monetary Fund (IMF), which emerging economies have long complained were too Western-centric.
Earlier this week, the Indian government expressed hope that the bank would be headquartered in India, which would have boosted Modi's domestic ratings following a lackluster first 45 days as prime minister, experts say.
Securing India as the headquarters for the BRICS development bank would have elevated Modi to the global status to that of a visionary leader, Manjeet Kripalani, executive director of the Indian Council on Global Relations, wrote in an op-ed in the Financial Times on Tuesday.