India’s smart alliances with island states

As India struggles to manage China’s economic and diplomatic influence in its immediate neighborhood, it has recently made progress in building stronger ties with four crucial Indian Ocean island states: Mauritius, the Maldives, Seychelles and Sri Lanka. What has been done – and what has worked – may well affect Australia’s ‘step forward’ in the Pacific.

Improving these ties took time, a lot of diplomacy on the part of Indian leaders and significant financial investments. Each of these four states has had past differences with India. At one time or another, New Delhi has intervened – or simply meddled – in their internal affairs. During the 1980s, Indian military or intelligence services helped foil coup attempts (or dreaded attempts) in Mauritius (1983), Maldives (1988) and Seychelles (1986). It is well known that India also found itself embroiled in Sri Lanka’s civil war against Tamil separatists, first in the shadows, then as peacekeepers, and finally as protagonists.

More recently, economic issues have been the main source of contention – apart from the evolution of these states’ ties with China. India runs sizable trade surpluses with the four states, raising fears, particularly in Sri Lanka, that further bilateral or regional trade liberalization could negatively affect their smaller economies. The bridge is not entirely in favor of New Delhi, with Mauritius second only to Singapore as a conduit for foreign direct investment flows to India.

It is, however, the China issue that has most preoccupied New Delhi in recent years and generated the most friction in its relations with the four states. India has worried for more than a decade about the prospect of Beijing gaining influence across South Asia and the Indian Ocean region. China’s role in developing the port of Hambantota in Sri Lanka, from 2008, has long angered New Delhi. Among strategists, it has helped fuel support for the “string of pearls” theory, according to which Beijing aims to secure a series of bases stretching from the South China Sea to East Africa, by left to encircle India; the same goes for the deployment of the Belt and Road Initiative since late 2013, which involves a series of new investments along what China calls the “Maritime Silk Road”.

It is recognized that New Delhi cannot muster or direct the same amount of capital that Beijing can deploy. Instead, particularly under the government of Narendra Modi, first elected in May 2014, India has pursued a calibrated and asymmetric strategy to improve its ties with Mauritius, the Maldives, the Seychelles and Sri Lanka. And interestingly, given all the talk of how much influence China’s money could buy, it seems to be paying off.

India’s approach has three dimensions. The first and most obvious is diplomatic. The Modi government has ensured regular meetings between leaders and ministers. Modi himself made state visits to three of the four states in March 2015, missing the Maldives only due to the instability generated by the arrest of former President Mohammed Nasheed a month earlier. Since then, however, he has made two trips to Malé, as well as two more to Columbo. Significantly, Modi made visits to the Maldives and Sri Lanka, the first of his new term. Additionally, leaders from Mauritius and Sri Lanka attended Modi’s inaugurations in 2014 and again in 2019.

This increased diplomatic attention has been accompanied by a deeper commitment to defense and security. As a new report by Dhruva Jaishankar of Brookings India highlights, India has worked hard to improve maritime domain awareness in the Indian Ocean, including information sharing with the four states, new radar facilities and communications and regular patrols by its P-8 surveillance system. aircraft in major exclusive economic zones belonging to Mauritius and the Seychelles, to detect and deter illegal fishing, among other activities. The Indian Navy has also stepped up its patrols in these areas and across the Indian Ocean. Mauritius agreed to allow India to develop and use new port facilities. Patrol boats and other equipment, including helicopters, were donated to the Coast Guard and the Navy, loans were made to purchase additional equipment, and training was provided or improved.

Finally, India has strengthened its regional development assistance and technical cooperation. In 2017, for example, New Delhi extended half a billion dollars in credit to Mauritius. At the end of 2018, he gave $1.4 billion to the Maldives, in part to help them pay off Chinese debt. In early 2019, the Reserve Bank of India provided Sri Lanka with nearly the same amount under a swap deal to provide it with enough hard currency reserves to help maintain investor confidence.

Together, these measures appear to have advanced the Modi government’s goal of enhancing, as it puts it, “security and growth for the whole region” (SAGAR), at least in those parts of the Indian Ocean. New Delhi’s ties to these four states look much stronger today than they have for some time, despite China’s growing weight in the region and occasional diplomatic wrangles.

There may be lessons to be learned from these improvements, and not just for India. First, sustained and respectful diplomacy at the leadership level can open up opportunities for cooperation. Second, it is clear that small and medium-sized states share security concerns about China – if only with regard to its fishing fleets – that more powerful actors can help resolve on their own, or as India has done in building an Indian Ocean-focused strategic partnership with France, in collaboration with others. Third, carefully targeted economic and financial aid – albeit costly and sometimes a consequence of China-related indebtedness – can pay diplomatic dividends.

India could, of course, face setbacks in the near future in one or more of these island states. Sri Lanka is of particular concern. Gotabaya Rajapaksa could well win the presidency in a future election, and given his family ties to Beijing and Chinese interests, he could tip the country towards the People’s Republic. It would be a test of India’s approach and the resilience of the bonds it has built.

Canberra should watch this situation carefully, given fears that China could interfere in the Sri Lankan election. And he could take a closer look at what India has achieved in the Indian Ocean, with relatively meager resources, through concerted diplomacy, responsiveness to local concerns and calibrated assistance.

This piece was produced as part of a two-year project undertaken by the National Security College on the Indian Ocean, with support from the Department of Defense.