Sri Lanka and the Sino-Indian rivalry

The politically astute and reportedly pro-China Gotabaya Rajapaksa will cultivate both India and China, notwithstanding the $450 million credit line extended by India to Sri Lanka and their determination to fight terrorism. Sri Lanka wants “equidistant” ties with all countries. Mr Rajapaksa’s  election as Sri Lanka’s president will not change much its ties with Asia’s arch-rivals — India and China. India is Sri Lanka’s largest trading partner. China is the largest foreign investor in Sri Lanka and the long-standing arms supplier that provided weapons to Colombo during the civil war. Sri Lanka’s investment and defence ties with China strengthened even under the presidency of the supposedly pro-India Maithripala Sirisena. The strength of the two relationships will hinge on what each offers Sri Lanka.

India’s biggest concern will be whether Beijing’s investments will translate into a stronger strategic foothold for China in Sri Lanka and in the Indian Ocean region (IOR). Neighbouring Sri Lanka’s strategic location in the Indian Ocean is of consequence to India. Sri Lanka stands at the crossroads of shipping lanes that connect China to West Asia.  Unlike India, Sri Lanka has climbed on to China’s Belt and Road Initiative. (BRI)  But along with India, it joined the China-led Asian Infrastructure Investment Bank as a founding member.   

Traditionally, India has regarded the Indian Ocean as its sphere of maritime influence. Parts of the Indian Ocean comprise India’s territorial waters. About 90 per cent of India's trade by volume — and all its vital oil imports — are carried by sea, so the safety of sea routes is a strategic and economic imperative. 

While recognising that geography gives India a special role to play in stabilising the Ocean and South Asia, China has warned that the Ocean is not India’s backyard.  

The Indian Ocean has not been an old-established Chinese sphere of interest. But as the world’s largest oil importer China buys more than 40 per cent of its oil from West Asia. The oil is transported by sea. Unsurprisingly, access to ports in the IOR —and the acquisition of a stake in them — are among China’s top security interests.  

Illustration by Binay Sinha

Moreover, as an aspiring global power, China has expanded its economic and military presence in the Indian Ocean over the last decade. Confirming the link between strategy and economics, China’s 2015 Defence White Paper highlighted the safeguarding of  national security and development interests. 

In Sri Lanka, as in other states in the Indian Ocean area, China has increased its clout in two outstanding ways. First, it has built trade and investment ties with them. Second,   it has expanded its naval presence. China has thus gained reliable access to naval facilities and a network of deep water port facilities in key points around the Ocean.   

India says that China has moved submarines, destroyers, special operations forces and guided-missile frigates into the Indian Ocean. 

In Sri Lanka, China has invested some $ 11 billion in sectors including infrastructure development, transport, power and energy. China will help Sri Lanka to compete with India’s financial centre in Gandhinagar by funding the   International Financial City in Colombo, which is being built to realise Sri Lanka’s ambition of becoming a financial and logistics base in the IOR.  Competition and friendship with India obviously go together. 

One of China’s biggest investments has been in the south-western port of Hambantota. To transform Hambantota from a small fishing town into a shipping hub, Colombo turned to Chinese financing, which was to the tune of $1.3 billion. But Sri Lanka could not repay the loans and in 2017, it agreed to give China a controlling equity stake in the port and a 99-year lease for operating it. For China, this was “another milestone” along the path of its transcontinental BRI.  The reason? Hambantota is part of a network of ports that puts China in a position to challenge America’s primacy in the Indian Ocean.  

From an Indian perspective the growing transfer of arms and military cooperation between China and Sri Lanka is worrying. The alarm went off in 2014 when Sri Lanka allowed two Chinese submarines and a warship to dock at the Colombo Port. 

The frequency of Chinese naval visits to Colombo troubles India. Challenged by China’s economic and military expansion in a strategically important area, India is strengthening its own military presence in the IOR. 

But economically sluggish India faces tough Chinese competition in Sri Lanka and the Indian Ocean.   China’s rise as a naval power stems from 40 years of sustained progress, followed by the strengthening of economic and military ties with Sri Lanka and other littoral and island states across the IOR. Apart from strengthening   its capacity to implement major infrastructure projects in countries in this area, India needs to modernise its economy and armed forces, especially its navy. 

China’s economic and military presence in Sri Lanka — and concomitant naval presence in the Indian Ocean — is likely to increase in the years to come. Sino-Sri Lankan ties already show how the   mix of economics, strategy and capacity to build a blue-water navy has established China’s major role in a long-lasting Great Game in the Indian Ocean.  Will India be able to upgrade its armed forces quickly enough to challenge China’s military role in Sri Lanka?   Its ability — or inability — to achieve that will have consequences for its status as a major South Asian power.

The writer is a founding professor of the Centre for Peace and Conflict Resolution in New Delhi. | Website: www.anitaindersingh.com