The union cabinet chaired by Prime Minister Narendra Modi on Wednesday decided that steps may be initiated to acquire membership of the European Bank for Reconstruction and Development (EBRD).
Membership of EBRD would enhance India's international profile and promote its economic interests. Access to EBRD's countries of operation and sector knowledge will give a boost to India's investment opportunities.
It would increase the scope of cooperation between India and EBRD through co-financing opportunities in manufacturing, services, information technology, and energy.
EBRD's core operations pertain to private sector development in their countries of operation. The membership would help India leverage the technical assistance and sectoral knowledge of the bank for the benefit of development of private sector, a finance ministry release stated.
The government expects this to contribute to an improved investment climate in the country by improving the competitive strength of Indian firms and providing enhanced access to international markets in terms of business opportunities, procurement activities, consultancy assignments etc.
Consequently, this would open up new vistas for Indian professionals on the one hand, and give a fillip to Indian exports on the other.
Increased economic activities would have employment generating potential. It would also enable Indian nationals to get employment opportunity in the Bank.
The minimum initial investment towards the membership of EBRD will be approximately €1 (one) million. However, this assumption is based on India deciding to buy the minimum number of shares (100) required for obtaining membership. If India were to buy a higher number of EBRD shares, the financial implications could be higher. In-principle approval of the cabinet at this stage is being obtained for joining the Bank.=
The issue relating to acquiring membership of the EBRD has been under consideration of the government ever since India's entry into the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB).