As both the new banks, based in China, become operational in the coming months, the sponsors have maintained their role is to complement the efforts of existing international financial institutions. Developing countries have often been frustrated by the rigid approach of the 70-year old Bretton Woods 'twins' - IMF and the World Bank - both of which have functioned for years without any basic restructuring such as would reflect the relative economic weights of countries as they grow and contribute to the growth of the global economy.

Financial institutions have often served to advance free market policies including regimes of austerity for poorer countries with low levels of consumption. IMF also has not been able to implement so far the 2010 reforms designed to give increased voice and representation for emerging market and other developing countries commensurate with their weight in world economy. This is because of a single country's (USA) lack of ratification of reforms, voted by the rest of Fund membership. This only underlined the urgency of organisations like BRICs to develop alternative sources of financing like NDB, especially for infrastructure building for which no private capital would be easily forthcoming.

NDB, of which India's veteran banker Mr. K V Kamath is President, is designed to finance infrastructure, specially 'bankable projects'. NDB's initial subscribed capital of 50 billion dollars being equally shared among the five founding emerging market economies. The Bank aims to foster financial and development cooperation within BRICs, accounting for more than three billion people and over 25 per cent of global output. Given the magnitudes of resource requirements for building infrastructure in Asia in trillions of dollars, both NDB and AIIB have been welcomed even by traditional regional development banks.

The NDB launch will be accompanied by the Contingent Reserve Arrangement (CRA) of 100 billion dollars (with varying contribution for members) for support to member-countries tide over global liquidity or short-term balance of payments pressures, including where members' national currencies are adversely affected by volatility in financial markets. This fund is scheduled to start lending in 2016.

Prime Minister Narendra Modi will attend the BRICs Summit (July 8) in the Russian city of Ufa, capital of one of the 'autonomous republics' in Russian federation and later that of SCO (Shanghai Cooperation Organisation), which is opening its doors for full membership to both India and Pakistan, hitherto given observer status. SCO, launched in 2001, was aimed at stabilising borders of China and Russia with the Central Asian nations which emerged in the post-cold war world.

A series of developments over more recent years had brought China and Russia in closer economic relationship with energy projects and pipelines to connect the greater Eurasian region. The major Chinese initiatives like 'One Belt One Road' and Russia's proposed Eurasian Economic Union (EAEU) are expected to find echoes at the SCO Summit. China has, provocatively for India, included a 46-billion dollar corridor linking Pakistani port of Gwadar through the vast illegally occupied terrain of Kashmir (Gilgit-Baluchistan) to Xinjiang in the North..

Mr Modi has combined the BRICs Summit with special visits to the five Central Asian countries (July 6-13)- Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan, which take on even greater significance to India in the geo-political tensions with the Islamic state terrorism extending its deadly reach across Central Asia to as far as Afghanistan. India has to get its act together in this geo-strategic region with its resource endowments and ongoing trade and economic ties, yet to gather momentum.

It is here that Mr Modi's diplomacy would be at work in giving an impetus to bringing India and Central Asian region, bordering the giant China, with is own geo-strategic objectives as well as Russia, in closer economic and security ties. Central Asia is a strategic region endowed with energy and other mineral resources including uranium. India had over the years gradually developed trade and economic relations with countries of the region, notably Kazakhstan, the largest of the five.

Mr Modi's two-day visit in Kazakhstan is expected to result in renewal of uranium supply deal, a comprehensive defence agreement and a host of bilateral deals across some sixty sectors. ONGC is also drilling an oil field in Kazakhstan. The visit is also expected to inject some momentum in the planned 1078-mile pipeline, Turkmenistan-Afghanistan-Pakistan-India, to transport natural gas.

This region is confronting the spread of terrorism by forces of the Islamic State operating from Syria and Iraqi territory. Large numbers of youth of this predominantly Muslim region have been drawn into the IS terror group. Facing the threat of radicalisation, states in Central Asia, bordering Afghanistan, are trying to counter the influence of Islamic forces. With mutual security concerns, the Prime Minister's team would have talks on countering terrorism with technology, training of forces and other related ways.

Two big infrastructure initiatives, China's 'One Belt, One Road' stretching across Asia toward Europe and Russia's Eurasian Economic Union (EAEU) Framework, which includes some of the Central Asian states, would integrate regions creating great development opportunities for both sides on the Eurasian landmass. China has created a 40billion dollar 'Silk Road Fund' to finance roads, railways, airports, power plants and other projects for its initiatives.

The outcomes at UFA summits and posturings in SCO have to be watched for their import not only for Asia of the future in the context of China’s assertions of maritime sovereignty resisted by Washington and on a broader scale, given Russia’s estranged relationship with West over its Ukraine misadventure and both Communist giants opposed to the American “pivot” in Asia. This is where Mr Modi may be treading cautiously. (IPA Service)