India has announced a Rs 1,000 crore fund to be set up to support projects in the bilateral and multilateral markets to ease tensions.
The Government has announced that the funds will be utilised for infrastructure projects and for the implementation of bilateral and international projects, including joint projects with China.
The fund will be used to provide assistance to the government of the Republic of India in the development and maintenance of infrastructure projects for the benefit of the Indian people.
The fund will cover all costs of the project, including maintenance of road, railway and water infrastructure, road maintenance, electricity generation and distribution and the rehabilitation of infrastructure damaged during natural disasters, natural calamities and war.
The funds will also support joint projects that have been signed with China, as well as projects to boost trade between the two countries.
India and China have a history of rivalry and mutual distrust.
Since the 1962 war, India and China fought a war of independence, in which India lost many of its territory.
In 1984, China declared a maritime border dispute, which India retaliated by seizing two of its most strategic islands in the Bay of Bengal.
The latest round of tension has been sparked by the Indian Supreme Court’s recent ruling in favour of a lawsuit filed by a Tibetan exile group.
The court ruled that Tibetans living in India should be allowed to choose between returning to Tibet or going back to China.
China has repeatedly denied its claim to the area, saying it is a part of its Tibetan Autonomous Region and that any claims to Tibet are “unfounded”.