Prime Minister Narendra Modi and Chinese President Xi Jinping met for the first time on Tuesday at the BRICS summit in Fortaleza, Brazil. Though the summit also involved the remaining BRICS countries – Brazil, Russia and South Africa – the simmering rivalry between India and China overshadowed the launch of a joint development bank aimed at challenging Western dominance of global finance.

According to Reuters, leaders of the five BRICS countries are expected to sign off on plans to create the $100 billion bank and a reserves fund of the same size – yet on Tuesday they had still not agreed on where it would be headquartered due to a disagreement between China and India over who will host the bank.

Negotiations have also reportedly stalled for now on which of the countries will hold the first five-year presidency of the bank.
  
"This should be easy to resolve but we have this dispute. If it doesn't move forward, we may have to leave the decision for another meeting," an unnamed official told Reuters.

A delay could be an embarrassment for the BRICS, a club of large emerging market countries that saw spectacular growth in the first decade of the 21st century, only to suffer sluggish growth since 2010.
 
The official said that if no deal was reached on Tuesday, the five leaders could still agree on the creation of the bank and leave the decision on the headquarters and its president for a later date.

Negotiations to create the bank have reportedly dragged on for more than two years as Brazil and India fought China's attempts to get a bigger share in the lender and thereby dominate its activities.

"It will be every country's desire, and so will it be India's, to have it in India, because Delhi or any city in India has its natural advantages, English-speaking, very skilled manpower, and if you look at the geographical position of all the BRICS countries, the five of them, India is very centrally located," Nirmala Sitharaman, India's trade minister and part of the Indian delegation in Brazil, told Times Now.

The disagreement behind closed doors between India and China belied the public expressions of cooperation between Modi and Xi. In a tweet, the Indian Prime Minister described their first meeting, that went beyond schedule to about 80 minutes, as “very fruitful”. The Chinese President said the two Asian giants should join hands in setting global rules and invited India to attend a summit of the 21-nation APEC trade group in Beijing in November.

"Judging from either bilateral, regional or global perspectives, China and India are long-lasting strategic and cooperative partners, rather than rivals," Xi said after their meeting, according to Chinese state news agency Xinhua.

Yet the Asian rivals still share a disputed border, which remains the biggest single impediment to better relations, despite the growing bilateral trade.

While both new leaders are publicly pushing cooperation, it is clear that there is a lot of strategic jostling taking place, with both India and China keeping an eye on the changing strategic balance in Asia with the waning influence of America in the region.

- Karan Singh