Three Banks, One Country: What India Is Actually Doing With The World Bank, The AIIB And The NDB
Anant Srivastava, Founder and Lead Policy Analyst, Development Policy Lab INDIA (DPLI), New Delhi
ABSTRACT
Since 2014, India has done something that does not fit neatly into how scholars usually describe emerging power behaviour toward multilateral institutions. It has kept deepening a borrowing relationship with the World Bank that goes back to 1948, while at the same time building two entirely new relationships, as a founding member of the China-led Asian Infrastructure Investment Bank (AIIB) and the BRICS led New Development Bank (NDB), both launched in 2015. Scholars usually describe rising power behaviour toward institutions as a binary: a country either integrates into the existing Western led order, or works to challenge and replace it. India's behaviour across these three institutions fits neither box cleanly and this paper argues the binary itself is the problem, not India's behaviour.
This paper asks a direct question: is India's simultaneous engagement with three multilateral development banks, each with different governance structures, shareholders and geopolitical alignments, the product of a coherent strategy or opportunistic borrowing that happens to look coordinated in hindsight ? To answer this, the paper traces India's engagement pattern across all three institutions since 2014 using publicly available data on portfolio size, sectoral concentration, governance participation, and conditionality intensity, read against the existing literature on regime complexity and emerging power agency.
The finding is that India's engagement is differentiated, not uniform and the differentiation follows an identifiable logic. India uses the World Bank primarily for policy reform signalling, technical assistance and institutional credibility, drawing on the Bank's reputational weight as India tries to attract foreign investment and position itself as a serious development partner for other countries. India uses the AIIB for large-scale infrastructure financing where speed and reduced conditionality matter more than policy dialogue, leveraging its position as the bank's second-largest shareholder and largest country of operations. India uses the NDB as a platform for Global South solidarity and a genuine hand in shaping alternative development finance norms, a role available to India only because the NDB's governance gives all five founding members equal standing regardless of economic size.
This paper terms this pattern Differentiated Multilateral Engagement, distinguishing it from two adjacent concepts already in the literature: forum shopping, which describes moving between institutions to find favourable rules for a single decision and hedging, which describes maintaining relationships with competing blocs primarily to avoid dependence. Differentiated Multilateral Engagement is neither. It is simultaneous rather than sequential, and constructive rather than purely defensive, using each institutional relationship to actively build a specific kind of value rather than simply avoiding the downside of relying on one bank alone.
The implications extend beyond India's specific case. If large middle income countries engage multilateral development banks this strategically, development finance governance scholarship needs a framework treating these countries as agents shaping institutional norms from within, not simply as recipients of whatever conditions a lending institution sets. It also suggests the proliferation of development banks since 2015 is not necessarily a zero- sum contest for borrower loyalty. India's engagement with the AIIB and NDB has not reduced its World Bank relationship and may have modestly strengthened India's negotiating position within it by reducing dependence on any single lender. Whether this pattern generalises to other large borrowing countries and what it means for safeguard standards and conditionality architecture across the system, is a question this paper raises but cannot fully resolve and is flagged as a priority for future comparative research.
Keywords: India, Multilateral Development Banks, World Bank, AIIB, NDB, Strategic Autonomy, Regime Complexity, Emerging Powers, Development Finance Governance.
