By P.K.Balachandran/Daily News
Colombo, October 8: Undeterred by the setback in Bangladesh due to the overthrow of a friendly Prime Minister Sheikh Hasina, India is continuing its policy of cultivating countries in its immediate and extended neighbourhood.
Fences are being mended with estranged Maldives. Ties with Sri Lanka are being reinforced to ensure that the new Left-nationalist government led by President Anura Kumara Dissanayake, is accommodative to India. Tentative attempts are being made to break the ice with traditional rivals China and Pakistan.
India has expressed willingness to its increase economic engagement with China and cooperate with it to develop the Shanghai Cooperation Organization (SCO). India would be attending the SCO summit to be held in Pakistan on October 15 and 16. Though no bilateral with either China or Pakistan is planned, India’s attendance at the SCO will itself help break the ice with China and Pakistan
Resumption of bonhomie with India’s eastern neighbour Bangladesh may have to wait till the issue of the extradition of Sheikh Hasina is settled one way or the other. But there is hope of a return to warmth if the trajectory of Indo-Maldivian ties from antagonism to cooperation is anything to go by.
Maldives
A pro-Chinese government at Male led by President Mohamed Muizzu was backing an “India Out” campaign in 2023 and the first part of 2024. But within months, Indian diplomacy swung into action and made President Muizzu back track on the expulsion of Indian military personnel and agree to accept Indian civilians in place of the Indian military personnel. Muizzu also suspended a parliamentary investigation into past agreements with India.
A severe foreign exchange shortage in Maldives enabled India to step into the breach and help Maldives out. It pumped money to enable Maldives to keep its head above water. A US$ 50 million Treasury bill was extended by a year. During the on-going visit of President Muizzu to India, a U$ 400 million currency swap arrangement is to be entered into to help Maldives make impending interest payments on foreign loans.
India is to build water and sewerage networks on 28 islands with a US$ 800-million Line of Credit. India has invested around US$ 220 million in the strategically located Addu atoll. With Indian funding, Maldives is redeveloping the Gan International Airport in Addu with an outlay of US$ 29 million. The India-funded Addu Reclamation and Shore Protection Project involves an outlay of US$ 80 million. During in current sojourn in New Delhi, the Maldivian President is to discuss more projects in a wide variety of fields.
Sri Lanka
In his first ever interaction with Sri Lankan President Anura Kumara Dissanayake, India’s External Affairs Minister, S.Jaishankar briefed him on India’s economic and technological capabilities and what India could do for Sri Lanka’s development especially in the field of energy production and transmission, fuel and LNG supply, connectivity, digital public infrastructure, health and dairy development.
On Sri Lanka’s debt restructuring efforts, Jaishankar recalled how India supported international efforts to ensure Sri Lanka’s financial stability and recovery from the economic crisis. India was the first country to extend aid to stricken Sri Lanka amounting US$ 4.5 billion and give financing assurances that enabled the IMF to finalize the Extended Fund Facility of US$ 3 billion.
Jaishankar confirmed India’s support to Sri Lanka in the Official Creditors’ Committee for Sri Lanka’s agreement with International Sovereign Bond (ISB) holders. He further said that India is willing to expedite the conclusion of a bilateral MoU with Sri Lanka.
In his discussion with Foreign Minister Vijitha Herath, Jaishankar said that India is to modernize the Kankesanthurai port in north Sri Lanka through a grant of US$ 61.5 million. He further said that payments for seven completed Line of Credit projects to the tune of USD 20 million could be converted into a grant. India had also decided to gift 22 diesel locomotives to the Sri Lankan Railways, Jaishankar said.
In response, President Dissanayake said that India’s economic support is critical for Sri Lanka to realize its vision of a prosperous country meeting the aspirations of its people. He referred to the potential for exporting renewable energy to India as it would help reduce production costs in Sri Lanka. The President also noted the contribution of Indian tourists to the Sri Lanka’s economy and said that this has the potential to grow further. Dissanayake assured that Sri Lankan territory will never be allowed to be used in a manner inimical to India’s security interests.
China through SCO
India would be warming up to traditional rivals China and Pakistan at the Shanghai Cooperation Organization (SCO) summit to be held in Pakistan on October 15 and 16. As former Ambassador Vishnu Prakash put it in a piece in First Post dated September 10, the SCO provides a vital platform for India to engage with Central Asian states, Russia, Iran, the Gulf, China and fellow South Asian states.
The ten member SCO has Mongolia and Afghanistan as Observers. Azerbaijan, Armenia, Bahrain, Cambodia, Egypt, Kuwait, the Maldives, Myanmar, Nepal, Qatar, Saudi Arabia, Sri Lanka, Turkey, and the UAE are Dialogue Partners.
The SCO is primarily a security body meant to cooperate in “combating “terrorism, separatism, and extremism in Central Asia.” Its Regional Anti-Terrorist Structure (RATS) regularly undertakes joint anti-terrorism exercises.
China, the richest and the most powerful member of the SCO, has used it to enhance ties with Central Asian countries in trade, energy cooperation, digital economy, local currency settlements, environmental protection, information and food security. India could also do likewise.
The SCO is a forum where the top most Indian and Chinese leaders could meet and iron out differences. India’s economic relations with China have grown despite many hiccups. In the fiscal year 2024, bilateral trade between India and China reached US$ 118.4 billion. Imports from China increased by 3.24% to US$101.7 billion, while exports to China surged by 8.7% to US$16.67 billion. India need to export more to China.
On July 25, India’s Finance Minister Nirmala Sitharaman endorsed her economic advisor V.Anantha Nageswaran’s proposal to open the country to direct investment from China, frozen since the Sino-Indian border clashes of 2020. Nageswaran had said that to boost its global exports, India can either integrate into China’s supply chain or promote foreign direct investment (FDI) from China.
“Among these choices, focusing on FDI from China seems more promising for boosting India’s exports to the US, similar to how East Asian economies did in the past,’” Nageswaran said.
Interestingly, the Asia Times newsletter Global Risk-Reward Monitor reported exclusively July 11 that Prime Minister Narndra Modi had asked Russian President Putin to help India resolve its longstanding border dispute with China.
Pakistan
Indian External Affairs Jaishankar’s visit to Pakistan will be a break from a past of avoidance. Officials denied that there will be bilateral talks. Jaishankar himself said that he would be going for the SCO summit in Pakistan and not for talks with Pakistan.
But attendance could lead to a thawing of the frozen ties, as Ambassador Ajay Bisaria told Hindustan Times. “India has signalled its desire to stabilise the troubled relationship by sending its foreign minister to the SCO meet. The ball is now in Pakistan’s court and it must seize the opportunity and propose a meaningful bilateral meeting,” Bisaria said.
In August, Jaishankar himself said: “India is not passive on Pakistan and will react to both positive and negative developments.” Thus, India’s door is not closed to Pakistan.
And as Ambassador Vishnu Prakash said: “We are not destined to remain adversaries forever. Sooner or later, opportunities could present themselves for discreet and meaningful interactions to break the logjam. The name of the game is to keep channels of communication open.”
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