Indian Ocean Islands Diplomacy

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TOPIC: General Studies 2

• International Relations

Sri Lanka – An example of the Contest between India and China

Prime Minister Narendra Modi and President Gotabaya Rajapaksa agreed to accelerate Indian-assisted development projects in Sri Lanka and discussed the possibility of promoting investments by India’s private sector. 

• China’s development bank provided a $500 million loan to Sri Lanka in March to bolster the country’s official reserves.
• Sri Lankan President Gotabaya Rajapaksa sought the currency swap facility, in addition to $400 million the country has sought from India under the South Asian Association for Regional Cooperation (Saarc) framework
• Sri Lanka’s economy has been hit by the novel coronavirus crisis with tourism — a major foriegn currency earner — drying up completely with the embargos on travel. India has been negotiating a currency swap agreement with Sri Lanka for $ 400 million.
• He requested India to direct those responsible from India’s side to expedite construction of the East Terminal of the Colombo Port as early as possible as it will be a significant boost to our economic landscape

The move assumes significance against the backdrop of China’s concerted push to develop infrastructure projects in Sri Lanka and other countries under its Belt and Road Initiative, which has led to criticism from the US about these countries being exposed to predatory loans. 

India’s approach towards Indian Ocean Region during this crisis

India’s approach, including on the diplomatic front, has been proactive since the outbreak of the crisis. 

One of the first steps taken by India was to evacuate citizens of different countries along with its own citizens from Wuhan, China, the epicenter of the first COVID-19 outbreak. Those evacuated as compassionate cases included citizens from IOR countries such as Bangladesh, Myanmar, the Maldives, South Africa, and Madagascar. India not only evacuated these people, but also quarantined them in India as a precautionary measure before sending them to their respective countries.

Second, India has emerged as a major supplier of medicines to different countries worldwide in the fight against COVID-19. As part of that effort, India was the first responder to Mauritius and the Seychelles. Prime Minister Narendra Modi had assured all possible help to both these countries to face the challenge of COVID-19. Accordingly India sent a consignment of life-saving drugs, including hydroxychloroquine, to Mauritius and the Seychelles.

Thirdly, taking leadership role in region-building is at the root of India’s current regional approach on the recognition that it is in its own interests. Regional/subregional mechanisms are viewed as platforms to engage with the neighbourhood and to meet its aspirations as a rising power. Two strategic factors have significantly shaped India’s new regional approach. To sustain the new economic growth trajectory, it was imperative that ensure regional instability does not hamper India’s interests. The other factor was China’s growing footprints in the neighbourhood and the concern of losing its influence to China grew in India’s regional calculations.

What does China’s presence in the IOR mean for India?

India has traditionally considered the Indian Ocean region and countries in its immediate neighbourhood as within its sphere of influence. But China is now increasingly making its presence felt in the Indian Ocean region through its investments through the signature Belt and Road Initiative as well as through an increased naval presence. In 2017, China opened its first overseas naval base in Djibouti. It has been steadily increasing fishing as well as other economic activities in the Indian Ocean region particularly along the east coast of Africa — developments that India is keeping a wary eye on.

India’s competition with China could be considered asymmetric owing to differences in the economic and military capabilities of both countries. However, China’s development projects have resulted in indebtedness for many countries with limited resources. This situation creates an opportunity for India to present its own alternative to countries in the Indian Ocean Region, which would also facilitate increasing India’s footprint in the region.

The Indian Ocean region has been a major focus of China’s Belt and Road Initiative (BRI), and the fallout from Covid-19 has the potential to severely damage it, or at least considerably alter it. A major economic downturn, including a downturn in global trade, will likely significantly reduce the need for new infrastructure as well as the feasibility of recently-built infrastructure. Many planned projects will likely be put in the deep freeze and in some cases, regional states may find it increasingly difficult to service debt loads on existing BRI projects.  According to some reports, China has offered similar loans to Bangladesh, Nepal and Maldives. Bangladesh has also requested debt rescheduling or interest rate cuts on loans on several BRI projects.

However, Prime Minister Narendra Modi said during the video-conference with SAARC leaders on combating the COVID-19: “Our people-to-people ties are ancient, and our societies are deeply inter-connected. Therefore, we must all prepare together, we must all act together, and we must all succeed together.”

Connecting the Dots:

1. India’s diplomacy in the IOR could define its position in the changed world order. Comment.
2. A comparison of India’s situation with its neighbours is much more meaningful than the comparisons regularly put out by the Indian Ministry of Health and Family Welfare, where India is almost always compared to countries in North America or Europe. Do you agree? Explain.