Although officially cynical as to the aims of the BRI, India is a major recipient of related infrastructure funding.

The Madhya Pradesh road network: Urgent AIIB-backed upgrade underway.

While some have expressed surprise that Mumbai was the setting for last month's third annual meeting of the Beijing-headquartered Asian Infrastructure Investment Bank (AIIB), the choice was wholly in keeping with both the body's long-term agenda and its more recent track record. For more than a year now, India – despite its public protestations of concern over the apparent political intent behind the Belt and Road Initiative (BRI) – has been partnering with China in order to fund a number of its infrastructure projects, with the AIIB the primary investment vehicle.

It is also worth remembering that, after China, India is the AIIB's second-largest shareholder, as well as, of late, one of its key beneficiaries. Of the US$5.3billion in loans signed off by the AIIB, nearly a quarter of that sum – around $1.3 billion – has been allocated to India-based projects.

Opening proceedings on 25 June, Jin Liqun, the former banker and academic who now serves as the AIIB's President, made clear the links between the institution and the BRI programme, saying: "In addition to our formal partnerships, our members are involved in a wide range of regional infrastructure and trade arrangements, with the BRI being a prime example."

He later amplified his comments at the 2 July Forum on Belt and Road Legal Cooperation. Addressing delegates at the Beijing-hosted event, he said: "To my mind, all AIIB-backed projects are connected with the Belt and Road Initiative."

Of the 28 projects so far approved by the AIIB, seven are located in India, with a further five such initiatives in the pipeline. Among those already in place are two India-specific infrastructure funds and five developments seen as hugely BRI-friendly.

Of the funds, the National Investment and Infrastructure Fund Phase I – as approved on 24 June this year – is a $700 million undertaking co-financed with the Indian Government. Overall, the AIIB has put up $100 million as a means of addressing the equity funding gap that is currently bedeviling a number of Indian infrastructure projects. The other fund, the North Haven India Infrastructure Fund, is a private equity fund, overseen by Morgan Stanley, with a remit of raising between $750 million and $1 billion, with the AIIB committed to putting in up to $150 million.

The most recent initiative to secure AIIB approval is the Madhya Pradesh Rural Connectivity Project, a $502 million upgrade to the road network in Madhya Pradesh, India's second largest state and one of its poorest. The project will enhance the connectivity of 1.5 million people living in 5,640 villages throughout the state, while giving them improved access to education, health and retail facilities.

A major undertaking, the project will require the surface-sealing of 10,000km of existing roads and the construction of 510km of wholly new roads. The project will also put in place the civic support structures required to manage and maintain this upgraded road network. In order to deliver on this, the AIIB has agreed to provide $140 million of funding, with the World Bank putting in an additional $210 million and the Indian Government making up the balance.

The AIIB has also signed-off on $329 million in funding for the Gujarat Rural Roads (PMGSY) Project, an initiative it is co-funding with the Government of Gujarat. A further two projects have seen AIIB funding earmarked for upgrading India's electricity transmission facilities. This has seen the bank agree to provide $160 million of funding for the Andhra Pradesh 24x7 Power For All Project. Co-financed with the International Bank for Reconstruction and Development and the Government of Andhra Pradesh, this will facilitate a major upgrade for the state's electricity transmission network.

The AIIB is also to commit $100 million to a Transmission System Strengthening Project in Tamil Nadu, India's 11th largest state. This initiative is to be co-financed with the Asian Development Bank and India's Power Grid Corporation.

The final project – the AIIB's largest undertaking in India – is Line Six of the Bangalore Metro Rail Project. With the bank committed to providing $335 million of the estimated overall $1.785 billion cost, the project will involve a 22km extension to the city's existing metro system and the construction of 18 new stations. The co-financers in this particular project are the European Investment Bank and the Indian Government.

Geoff de Freitas, Special Correspondent, Mumbai

Having signed 14 BRI-related MoUs with China, Nepal must work harder than ever to keep India genuinely neighbourly…

Peak time: The importance of cross-Himalayan trade has transformed Nepal into a key BRI player.

Last month's five-day visit to Beijing on the part of Khadga Prasad Sharma Oli, the recently-elected Prime Minister of Nepal, seems to have opened the Belt and Road Initiative (BRI) floodgates, with 14 related projects having now been given the go-ahead by the Himalayan kingdom, while several existing hydro-electric developments have been galvanised back into life. Backed by a series of Memorandums of Understanding (MoUs), the new projects are largely geared towards boosting cross-border connectivity between the two neighbouring nations.

In a statement released in the immediate aftermath of the visit, both countries agreed "to prioritise the implementation of the connectivity-related BRI MoU as it relates to ports, roads, rail and air links and overall communications activity within the Trans-Himalayan Multi-Dimensional Connectivity Network." In a telling aside, Chinese Premier Li Keqiang, who hosted the visit, said: "I now have every hope that a Free Trade Agreement can be concluded in the very near future."

Overall, though, the most significant development to emerge as a result of the visit was the green light given to extending China's Tibetan rail network from its current terminus, close to the Nepal border, to Kathmandu. This will connect the Nepalese capital to Lhasa and plug into the wider mainland rail resource. Although some aspects of the project have yet to be finalised, China has already agreed to fund an in-depth feasibility study of the proposed extension.

With this initial study set to be completed next month – which will then be followed by a more in-depth two-year review – it is now expected that this line will become operational in 2025. In total, the project will require the laying of some 540km of additional track.

At present, estimates as to the final cost of the project vary from US$2.5 billion to $8 billion, a figure that Nepal – given that its total annual GDP is just above $20 billion – would struggle to find on its own. At present, there seems to be a tacit assumption on the part of Nepal that China and India, its other giant neighbour, will somehow cover the costs of both this extensive infrastructure upgrade and several of the energy projects already underway. If the bill was left for Nepal alone to carry, it is believed this overhead would prove a crippling burden for the country for generations to come, with no real ROI likely until well into the 22nd century.

All of which highlights another problem for the mountain kingdom – while looking to ensure its own economic development stays on course, it has to maintain a tricky balancing act, neither overtly-favouring nor inadvertently alienating China or India, its two suitors who, somewhat awkwardly, remain more competitive than co-operative. To complicate matters still further, while India has long had a quasi-monopoly on Nepal's external and internal trade, government figures in Kathmandu have made no secret of their desire to be a little more promiscuous, a development that their New Delhi counterparts have already intimated disapproval of.

This, however, has not deterred China from openly wooing its 30-million-strong neighbour at a time when India appears to have tightened its own purse strings. In 2017, for instance, Beijing pledged $8.3 billion in support of Nepal's infrastructure and energy development projects, more than 26 times the $317 million forthcoming from India over the same period.

Despite the clear challenges that remain, the potential size of the rewards on offer may yet prevail. From China's point of view – given that one of the key BRI aims is to open new markets for its more underdeveloped western regions, including Tibet and Xinjiang – establishing an effective trade route into India via Nepal remains a clear priority.

In order to deliver on this, mainland officials have already mooted the idea of a tripartite China-Nepal-India trade corridor, a similar arrangement to the existing China-Pakistan-India initiative. To date, India has refused to play ball. This is despite the fact that, as Nepal borders Uttar Pradesh, one of India's key food production and manufacturing hubs, a direct route through to China would clearly be in its own interest. Given the clear win-win-win on offer to all three prospective participants, there is still a strong belief that agreement on tripartite trade connectivity may yet be reached.

Geoff de Freitas, Special Correspondent, Kathmandu