Prime Minister Narendra Modi's first multilateral engagement, India along with other four Brics countries have signed a deal to create a new $100bn (Rs 10000 Cr) development bank and emergency reserve fund. Other four countries in the Brics group are Brazil, Russia, China and South Africa. The capital for the bank will be split equally among the five participating countries.

The bank will have a headquarters in Shanghai, China and the first president for the bank will come from India.

Brazil's President, Dilma Rousseff, announced the creation of the bank at a Brics summit meeting in Fortaleza, Brazil on July 15. She expressed confidence that the expected creation of a BRICS development bank and a reserve fund would benefit developing countries.
"It will give security and a kind of protection to the BRICS countries and others," she added.

Terming the agreement towards setting up BRICS New Development Bank a significant step, Narendra Modi said an open international trading regime is critical for global economic growth.

In his statement on the agenda "Sustainable Development and Inclusive Growth" at the sixth BRICS summit, he said the global economic environment remains uncertain and recovery was still fragile despite improved prospects.

Modi said that in an environment of political conflict and persisting weakness in major economies, countries have to be watchful for signs of a new bout of financial turmoil.

"Developments in Iraq and the wider region could affect this. I am also concerned that tight monetary policies in some countries could undercut investment and growth in ours," he said, adding an open, rule-based, international trading regime is critical for global economic growth and must address the aspirations of the developing world.

"It must also accommodate the special needs of the most vulnerable sections of our societies, especially in areas such as food security. This is our broad expectation from the negotiations in the Doha Round of WTO," he said.

"I am happy, the initiative announced at the BRICS Summit in New Delhi in 2012, has become a reality," said Modi, who is taking part in his first international conference as prime minister, on the agreement for setting up the BRICS bank.

The agreement on the BRICS Contingent Reserve arrangement was another major achievement, he said, noting these initiatives "rooted in our own experience as developing countries" show "our capacity to set up global institutions".


"We must encourage engagement between our states, cities and other local bodies," he said, calling for BRICS to be driven by "people-to-people" contact and the youth should lead this.


Other initiatives he suggested were an affordable BRICS healthcare platform, mechanism to further cooperation between small and medium enterprises and a common framework for promoting tourism.