G20 host India to propose China, other creditors take haircuts on loans: Report

G20 host India to propose China, other creditors take haircuts on loans: Report

(Image: News18 Creative)



India is drafting a proposal for G20 countries to help debtor nations badly hit by the economic fallout from the pandemic and Ukraine war, by asking lenders including China, the world's largest sovereign creditor, to take a large haircut on loans.

Two Indian government sources told Reuters of the proposal as finance ministers and central bank chiefs from the Group of 20 prepared to meet in Bengaluru next week. The gathering will be the first major event of India's one-year presidency of the G20, a bloc composed of the world's biggest economies.

The International Monetary Fund (IMF) said on Tuesday it would hold a virtual meeting with the World Bank, India, China, Saudi Arabia, the United States and other wealthy Group of Seven (G7) democracies on Friday to try to reach understandings on common standards, principles and definitions for how to restructure distressed country debts.

"India is designing a proposal" to try to persuade countries like China to take a big haircut in lending to nations in difficulty, said one of the Indian officials, both of whom declined to be named as they were not authorised to talk to the media.

China and other G20 countries were aware that