India’s National Security Challenges: The Growing Chinese Footprint in Sri Lanka and the Maldives

India’s National Security Challenges: The Growing Chinese Footprint in Sri Lanka and the Maldives

Shantanu Roy-Chaudhury

Introduction

The Indian Ocean has gained geostrategic importance due to the volume of trade that passes through it. At the same time, China’s Belt and Road Initiative (BRI) is increasing Chinese influence in numerous countries in Asia and across the globe. Against this backdrop, this paper seeks to examine how the growing Chinese footprint in Sri Lanka and the Maldives can have implications for India’s national security and how the Chinese expansion is of strategic importance to New Delhi.

The world’s third-largest body of water, the Indian Ocean is an extremely important region for India due to its connectivity and the volume of trade and energy resources that pass through it daily. Not only is most of India’s trade transported by sea, but also forty per cent of the world’s oil supply and sixty-four per cent of global oil trade travel through the Indian Ocean[1]. It provides critical sea trade routes that connect the Middle East, Africa, and South Asia with the broader Asian continent to the east and Europe to the west[2]. The region, therefore, is of immense security and strategic significance to India. To further place India in the Indian Ocean Region (IOR), one analyst has stated that “India’s 7,500 km-long coastline is geographically contiguous with the Indian Ocean — the western side being flanked by the Arabian Sea and the eastern side by the Bay of Bengal. Indian islands on each side, Lakshadweep and the Andaman & Nicobar Islands respectively, host forward naval bases overlooking the vast spans of maritime waters. As a natural barrier, the Indian Ocean is central to India’s territorial defences, privileging it with a built-in strategic depth”[3].

Furthermore, India is heavily dependent on the ocean’s resources, especially on the transit routes and on offshore oil platforms. Therefore, there is no doubt that the ocean is central to India and that the Indian Ocean is a priority to maintain India’s national security. Besides, as the littoral’s most populous country, India’s leadership role in the ocean is imperative for the region’s strategic future and the maintenance of the freedom of the sea lines of communication. From a security perspective, threats coming from the Ocean led to one of the worst terrorist attacks on the Indian mainland, as the terrorists of the 2008 attacks on Mumbai arrived by sea[4]. Piracy and smuggling also provide a security risk to India’s interests in the region, although piracy has declined noticeably as a result of collaboration with other nations. However, none of these compare to the security implications an increasing Chinese footprint could have in the region.

With the rise of China and the proclamation of the BRI by President Xi Jinping, “the belt refers to a series of overland roads, pipelines, railways, and other infrastructure through Central Asia, South Asia, and the Middle East to Europe. The road refers to a series of ports and maritime trade routes through the South China Sea and the Indian Ocean to the Middle East, the east coast of Africa, and onward to Europe”[5], the IOR has seen an increase in Chinese activity and investments in the surrounding countries. Due to this expanding footprint, India naturally has tangible concerns.

Sri Lanka

The relationship between China and Sri Lanka has long been amicable, with Colombo being an early supporter of Mao’s communist government. The two countries grew closer during Sri Lanka’s brutal twenty-six-year civil war, and in the process China became an indispensable partner[6]. Without Chinese backing, the Rajapaksa government would have had neither the resources nor the finances to fight the Tamil Tigers. Furthermore, China’s backing was crucial in international institutions where Sri Lanka was getting increasingly isolated due to accusations of human rights violations. Since the end of the civil war in 2008, China has played a role in the reconstruction of the affected regions. Between 2005 and 2017 Colombo accepted close to $15 billion to repair war-damaged infrastructure and develop new projects. With the initiation of the BRI project, and Sri Lanka playing a central role in its maritime aspect due to its important geographic location just above the international sea lanes, China has been even more generous with its investments in the island nation. These funds have been channelled into roads, airports, and seaports, the two highest-profile initiatives being the Hambantota Port Development and the Colombo Port Project[7]. The change in attitude towards Sri Lanka can also be seen as China’s foreign direct investment (FDI) into Sri Lanka grew from $16.4 million in 2005 to $338 million in 2015. This incredible jump was also noticeable where in 2005 the amount constituted under one per cent of the total FDI received by Sri Lanka and in 2015 it constituted thirty-five per cent of total Sri Lankan FDI[8]. Other major projects include the rehabilitation of the northern roads ($302 million), Greater Kurunegala Water Supply and Sewerage Project ($79 million), Narochcholai Coal Power Plant ($891 million), Colombo-Katunayake Expressway ($104 million), Broadlands Water Project ($69 million), Colombo Lotus Tower ($104 million), Moragahakanda-Kalu Ganga Development Project ($214 million), Hambantota Mattala International Airport ($292 million), Southern Expressway ($1.26 billion), and finally the Extension of the Southern Railway ($278 million)[9]. From a defence standpoint, China has been the largest supplier of arms to Sri Lanka since the 1950s. These transactions have included small arms, ammunition, landmines, naval vessels, and aircraft[10].

The Maldives

The Maldives, another island state historically under the Indian sphere of influence, has also recently seen a growing Chinese footprint slowly eroding India’s primacy in the region[11]. Like Sri Lanka, the Maldives’ geographical location is important for China’s BRI, however, Male does not share as much of a historical relationship with Beijing as Colombo does. The Maldives and China established diplomatic relations in 1972, and for a long time, economic cooperation was insignificant, with total trade in 2002 being only $3 million. Just like in Sri Lanka, economic ties have recently become more important, with China also becoming Maldives’ largest source of tourists. The Chinese ‘investment boom’ in the country began in 2014 when Xi Jinping made the first ever visit by a Chinese head to the island nation. This in itself reflects the islands strategic location[12]. The significance is also in the fact that its 1,200 islands claim an exclusive economic zone of 859,000 square kilometres (more than three times the economic zone the United Kingdom has privilege to) in a section of the Indian Ocean that touches the main shipping routes between East and West Asia and Europe[13].

China’s flagship project in the Maldives was the $210 million, two-kilometre, four-lane China-Maldives Friendship Bridge connecting the capital Male with its international airport. The biggest resort development deal in Maldivian history was also funded by the Chinese through the state-owned China Communications Construction Company[14]. Other Chinese projects in the country include the $620 million project to upgrade the Maldives airport, a twenty-five-storey apartment complex, and a hospital. The island of Feydhoo Finolhu, the nearest uninhabited island to Male has also been leased to a Chinese company for 50 years at a cost of $4 million[15]. This by itself could have adverse strategic implications for India. Furthermore, China also seems interested in developing the Ihavandhoo and Maarandhoo islands of the island chain[16]. These islands situated in the north of the country are closest to India and Sri Lanka and would make strategic sense for China to have a presence in them.

These enormous projects costing millions of dollars show how valuable Sri Lanka and the Maldives are in Beijing’s eyes and the extent to which they serve China’s strategic objectives. It has been elucidated above how after the introduction of the BRI, investments into these two island nations has increased manifold. Although at an initial glance, these seem to be developmental projects, there is no doubt that they have serious security and geopolitical implications, especially to India, which an increasing number of Chinese scholars view as a competitor and “replacing Japan as the second biggest threat to Beijing, following the United States”[17]. From a strategic lens, there are three main ways through which these projects and growing Chinese influence in Sri Lanka and the Maldives can affect India’s national security.

Debt Crisis - The millions of pounds of investments from China have not been out of good will and to ensure development. Although these projects, initially seem lucrative and enticing, there is reason to believe that Chinese investments can ultimately be detrimental. Jonathan Hillman’s study examining the strategic stakes of foreign projects has conceptualised a framework through which states use foreign infrastructure to advance their own strategic objectives. According to Hillman, one nation’s influence in another’s is explored through three stages – “Financing is the first and broadest avenue, providing the opportunity to extract diplomatic concessions, reward supporters, shape project plans, access resources, and gain operational control. The second stage, design and construction, provides an avenue for setting standards, transferring technology, and collecting intelligence. During the final stage, ownership and operation, which are considered together since the owner selects the operator, can be leveraged for deeper intelligence collection and to restrict or deny a competitor’s access”[18].

Through this framework, it is clear how these Chinese investments can be detrimental not only to the host country but also to other players in the region like India. This is particularly troubling if one looks at the second and third stage of Hillman’s work where intelligence collection, ownership, and operation can be dictated by the investors, i.e. China. Furthermore, the loans have come with interest rates which have racked up enormous debt for both island nations, potentially placing them in a ‘debt trap’. Approximately sixty per cent of Sri Lanka’s FDI has come from China between 2008-2012[19] while Maldives has a 1.3 billion dollar debt to China, which is more than a quarter of its gross domestic product[20]. This debt can increase dependence on China which Beijing can exploit and turn into political sway. Due to the strong links between the Chinese companies and the Chinese government, with most of them being state-owned entities, pressure can be applied to the island nations on political fronts. Political pressure from this angle includes but is not limited to undermining India’s position in the region. China’s overtures for BRI have also been termed as aggressive, as Chinese investments in Sri Lanka’s telecoms infrastructure were so pervasive that the measures garnered a ‘confidential’ United States diplomatic cable stating that “Huawei Telecommunications, a Chinese owned corporation, has worked diligently to corner the telecommunications infrastructure market in Sri Lanka…Huawei Sri Lanka is expanding aggressively into the new infrastructure market in the North and East, where they own more than 75 per cent market share”[21]. 

Measures like these, along with the fact that China has been accused of business ambiguity makes India suspicious of China’s motives and results in heightening tensions[22]. The debt crisis in Sri Lanka has also led to an equity swap where the Hambantota port was handed over to China on a 99-year lease in 2017[23]. China was given control of the port in lieu of $1 billion of the Sri Lankan debt to them. This manoeuvre has serious strategic implications for New Delhi as Hambantota has the potential to turn into a naval base for China in the future. Given the nature of the deal, China no longer has to inform or request permission from Sri Lanka before docking at Hambantota. This can lead to the possibility of military vessels using the port even as Colombo has rejected the claim that China might set up a forward military base at the strategically located port[24]. Alarming enough as the use of a port in Sri Lanka by the PLAN is to the geostrategic scenario in the region, there is the possibility of this happening again with the growing debt being incurred by the two countries leading to a direct threat to India’s national security.

Encirclement - Due to the proximity of Sri Lanka and the Maldives to India, some analysts believe that the Chinese are using the BRI project to encircle India and keep a check on her ambitions. Termed the ‘String of Pearls’, this theory states that China is taking on economic and investment projects with the various Indian Ocean states to secure ports or places where its military could potentially set up facilities. The location of these ports, which include the Kyaukpyu port in Myanmar and Gwadar in Pakistan, combined with Hambantota in Sri Lanka, are encircling India from the Bay of Bengal to the Arabian Sea. Furthermore, there have been reports of China wanting to build a naval base on the Marao island in the Maldives. This combined with the perception of having an ulterior motive of utilising the ports for military purposes, there are valid reasons for India’s national security establishment to be apprehensive[25]. However, the Chinese building these projects around the Indian subcontinent solely to contain India has more to do with furthering their own strategic interests and global military actions than wanting to surround India, which has become a convenient consequence. To further the argument, both Sri Lanka and the Maldives have had visits and dockings from the Chinese navy (PLAN). Although it is natural for such visits to take place among friendly nations, it is concerning for India to have a Chinese navy presence so close to its waters. Tensions were heightened in 2014 when two submarines and a warship docked at Colombo port in Sri Lanka without notifying New Delhi. Chinese Submarine deployment is seen to project strategic capability and was until recently a relatively unknown occurrence in the Indian Ocean region[26]. India did not protest aggressively to the submarines in Colombo even though it was seen as a major breach of trust between New Delhi and Colombo and also heightened tensions with Beijing. Although the submarines in Colombo do not imply that Chinese submarine deployments are provocative in nature, they do cause anxiety and can be viewed as diminishing India’s naval superiority in the region. The frequency of Chinese visits has become a concern along with speculation that an aircraft maintenance facility could be built by the Chinese in the eastern port city of Trincomalee, which India considers a strategic location in terms of national security[27]. Apart from the potential of an increased PLAN presence in India’s backyard, there is the possibility of a Chinese blockade of India’s sea routes if the situation ever escalates. Such a blockade could enormously affect India’s energy and oil transport from the Middle East and has the potential to cripple the nation’s efforts as a whole.

Eroding India’s Primacy - The Indian Ocean, along with the smaller littoral states of the region which include Sri Lanka and the Maldives, has traditionally been seen as being under India’s sphere of influence. China’s increasing influence in Sri Lanka and the Maldives could pose a challenge to India’s position in the region and to India’s national security by eroding India’s primacy in the region. Beijing’s ability to provide financial assistance and balance against New Delhi has tempted India’s smaller neighbours to seek the backing of the ‘extra-regional’ power to diminish India’s influence in its own backyard. Instances where an infrastructure agreement signed by an Indian company have been terminated and subsequently handed to a state-owned Chinese company add to the eroding of India’s primacy in the region[28]. Situated in an already tough neighbourhood flanked by boundary disputes with both Pakistan and China, the smaller states of South Asia now have China to look toward to play off against India, further complicating India’s neighbourhood policies. With the security implications mentioned above, it is no surprise that China’s increasing influence in the region makes India’s position in its neighbourhood even more precarious along with simultaneously eroding India’s historical primacy. India seems to have transcended becoming a regional power looking towards global aspirations. However, India ought to diplomatically maintain friendly relations with its neighbours to be able to focus on global affairs, while at the same time  protecting its own interests in the region. This is necessary due to the turbulent nature of South Asian political relations between India and its neighbours, where New Delhi has been bogged down focusing on the neighbourhood and managing its relations. China’s influence in Sri Lanka and Maldives only complicates this challenging situation, preventing India to transcend its neighbourhood while at the same time having increased national security challenges to worry about.

For the government of India, it is important to not only take notice and track these investments, but to also be viewed from a strategic point of view thinking ahead. As a rising power, New Delhi must look at the wider geopolitical canvas and develop its own capacity for strategic investments. Although India cannot match and directly compete with the economic prowess of China, the government should build on indigenous corporations which can be used to invest abroad. With the rise of China bringing together like-minded countries who are apprehensive of its consequences, India should take advantage of this phenomenon as it has with Japan. India and Japan have come together, along with the Sri Lankans to develop projects in Sri Lanka which include building the east container terminal at Colombo port[29]. The United States is also taking a much stronger stance against China under President Trump, and a closer relationship with America could benefit New Delhi’s strategic aims. Another way through which India can keep a check on Chinese investments is by engaging with China and investing in Chinese funded projects. This will not only lead to collaboration but would also help reduce suspicions and could result in a positive-sum game which could be nurtured into ‘good neighbourliness’. To be better placed in contemporary times, India should adopt a more proactive than reactive foreign policy.

Conclusion

India’s national security is challenged by the growing Chinese footprint in Sri Lanka and the Maldives. There is no doubt that the overall increased presence of the PLAN in the Indian Ocean can be looked upon with suspicion. However, the investments and projects initiated by China in the island nations, in the long run, could be of serious consequence to New Delhi’s national security challenges. According to Henry Kissinger, China’s leaders are masters of long-range strategic planning that have been inspired by timeless principles derived from China’s history and culture[30]. Michael Pillsbury, an American expert on China views the nation’s rise in a similar fashion and believes that China has a secret strategy to become the world’s dominant power by 2049, the one-hundredth anniversary of the founding of the People’s Republic of China[31]. Although this claim could be far-fetched, there is no doubt that Beijing is thinking of its investments in the Indian Ocean along geostrategic lines. It is in this light that China’s seemingly harmless manoeuvres through investments in ports and projects in Sri Lanka and the Maldives in the present could add a new dimension to challenge India’s national security in the future. This can be done through the debt trap China encapsulates them in, by encircling India through investments in ports and facilities in the IOR, and finally by eroding India’s primacy in its own neighbourhood, paving a way for further entrenchment of China in the region.

End Notes