London - Directors of the World Bank have voted to postpone two large new loans to India in protest at the country's escalation of the nuclear stakes in the region. The decision to defer the credits, worth $180 million is seen by aid experts as a serious blow to the country.
The World Bank decision - which follows an earlier loan postponement in the immediate aftermath of India's nuclear test last month - comes against a background of increasing turmoil on the country's financial markets. Meanwhile, India rejected attempts to draw it into a tripartite dialogue on the Himalayan region of Kashmir yesterday, and said the issue was a bilateral matter with Pakistan.
Earlier this week Japan had floated the idea of arranging talks in Tokyo between the two countries to discuss the territorial dispute over Kashmir - a proposal that Pakistan immediately accepted.