China’s growing influence
As an assertive and re-elected Xi Jinping flexes his muscles to challenge the predominance of US power across Asia, and globally, India will have to strengthen its defences along its borders with China. The recent Chinese intrusion in Arunachal Pradesh and its earlier intrusions in Ladakh now require strong attention across and beyond our land and maritime frontiers. There is a need for particular focus on Chinese moves in the Indian Ocean. It also needs to be borne in mind that the Biden administration has made a mess of US policies in the oil-rich Persian Gulf. Washington has ineptly and insensitively dealt with its vital relations with Saudi Arabia, amidst its continuing hostile relations with Iran. Beijing has, meanwhile, fostered a rapprochement between Saudi Arabia and Iran.
Building on its ties with Sri Lanka, India must take steps to promote rupee payments in trade, travel and investment.
China is now playing a notable role in developments across the Indo-Pacific. It has undermined US influence in the Gulf Region by getting Saudi Arabia and Iran to re-establish diplomatic relations. Moreover, with Russia flexing its muscles and expanding its influence by using its vast energy resources, Washington has been forced to acknowledge the reality that even friendly democracies like India will not join its boycott of Russia, especially when its energy interests are at stake. Both the US and India, however, have a shared interest in dealing with the growing Chinese maritime and economic power across the Indo-Pacific Region. In these complex circumstances, India has manoeuvred skilfully in dealing with two important South Asian neighbours, Pakistan and Sri Lanka, whose close ties with China have obvious implications for India’s security.
The Sino-Pakistan relationship is primarily directed against India. It is a relationship which includes arms transfers, both conventional and nuclear. Pakistan’s nuclear weapons and ballistic missiles that can target Indian territory from New Delhi to the Andaman and Nicobar Islands are of Chinese design.
Sri Lanka’s suspicions of India were accentuated during the Sinhala-Tamil ethnic conflict in the 1980s, when there were strong apprehensions of India’s links with the LTTE. Indians sometimes tend to forget that the ethnic conflict was confined to northern Sri Lanka, where Tamils lived for centuries. It did not involve the ‘plantation Tamils’ living in the country’s South. Southern Tamils in Colombo are full of praise for PM Modi after they met him during his visit to Sri Lanka.
Sri Lanka is going through an acute economic crisis, akin to what Pakistan is facing. The virtually bankrupt Colombo government was overwhelmed when Modi announced that India would contribute $4 billion to enable Sri Lanka to tide over its foreign exchange problems in imports of crucial items like fuel, oil and medicines. China stepped in rather late in the day, with a meagre pledge of $1 billion. The Export-Import Bank of China has offered Sri Lanka a two-year moratorium on debt repayments and said it would support the country’s efforts to secure a $2.9 billion loan from the IMF. But in real terms, China has done little to reduce the debt burden it has foisted on Sri Lanka.
What is important is that China has led Sri Lanka, like many other nations, into a debt trap. This situation arose primarily because of Sri Lankan borrowings for China’s construction of a number of projects in Sri Lanka, led by the Hambantota Port on its southern shores. There was a reckless disregard of the port’s financial viability. The port is located in the constituency of former President Mahinda Rajapaksa. Beijing now has a free run at the port for berthing its warships and submarines moving across the Indian Ocean. New Delhi has responded strongly to the Chinese presence at the port, through which large amounts of goods, including sensitive equipment for India, transit. The Adani Group has, meanwhile, secured separate port facilities designated as West Container Terminal for transit of all imports and exports by India, with a reported investment of around $700 million.
Amidst growing public anger against former President Gotabaya Rajapaksa and the entire Rajapaksa family, Sri Lanka’s Parliament endorsed the appointment of veteran politician Ranil Wickremesinghe as the new President last year. He has moved carefully and effectively in dealing with the virtual collapse of the Sri Lankan economy. There has also been fulsome praise for India’s External Affairs Minister and Finance Minister for swiftly delivering assistance.
Talking to Sri Lankan friends during a recent visit to Colombo, I was struck by the goodwill that India has earned in Sri Lanka in recent days. This must be complemented by moving ahead on a number of issues. As devout Buddhists, the Sinhala population seeks better facilities for pilgrimages to Bodh Gaya. It is imperative to improve train services for the pilgrims, while jointly examining measures for improvement of facilities for their stay in India. A number of measures are needed to promote rupee payments in trade, travel and investment. The Talaimannar-Rameshwaram ferry needs to be revived for facilitating travel.
Most importantly, new economic opportunities are set to arise as the Trincomalee Port becomes functional in the coming months. New Delhi and Colombo need to move imaginatively in encouraging and promoting private sector investment from India in this region of the Bay of Bengal. There are also large opportunities for private investment and cooperation in areas like airports, hospitality and higher education, even as India’s High Commissioner Gopal Baglay prepares to complete a difficult, eventful and successful tenure in Colombo.
