China shadow looms large as India looks to consolidate ties with neighbours

The China overhang will affect India’s relations with Sri Lanka, the Maldives, and Bhutan, as well | Illustration: Binay Sinha
There is no doubt about the elephant in the room. And if anything, it will be an even palpable presence in 2021. The China factor is expected to dominate in India’s relations with her South Asian neighbours in 2021, now more than ever before.

The immediate proximate event is going to be the election in Nepal, due in April. While India has suspended judgement on the recent events in the country leading to the election, there is hardly any doubt that by basing his campaign plank on “rashtrabad (nationalism)”, Prime Minister K P Sharma Oli sought to turn a bitter power struggle in his party — the Nepal Communist Party (NCP) — into a contest of sovereignty, with China backing his every move. At the heart of Nepal’s nationalism was the debate over the 2015 Constitution which sought to dilute the ethnic identity of Madhesis — those who live in the Terai, the plains bordering Bihar. The Madhes factor — and by extension the India factor — is bound to play an important role in the poll campaign. With it, the roles of India and China will also be an issue of contention in domestic politics.

The China factor will dominate India-Pakistan relations as well. Although the Imran Khan government is currently buffeted by internal upheavals, most analysts believe the government will carry on until 2023 when the general elections are due. The IMF programme to support Pakistan’s external account is expected to restart in early 2021. “The ruling Pakistan Tehreek-e-Insaf (PTI) will complete its term, ending in 2023, with the military's tacit support. Nevertheless, there will be considerable risks to political stability. The protest movement will put pressure on the government,” said Mosharraf Zaidi, an Islamabad-based political analyst. But independent analysts believe, relations with India will remain strained, as China and Pakistan scramble to consolidate ties, especially on the China-Pakistan Economic Corridor (CPEC), which is behind schedule.

The China overhang will affect India’s relations with Sri Lanka, the Maldives, and Bhutan, as well.

Ganeshan Wignaraja, a Sri Lankan researcher at the Overseas Development Institute, London, corrects the general impression that Sri Lanka’s foreign debt liabilities are on account of loans from China and therefore, Colombo is in the thrall of Beijing. In fact, he said, “Sri Lanka owes more of its external public debt to financial markets and multilateral and bilateral lenders than to China. Its generally high debt-to-GDP ratio over the past decade reflects the costs of a 30-year civil conflict, lacklustre post-conflict growth, and notable currency depreciation”. He added Sri Lanka’s external public debt owed to China amounted to $5 billion in 2018, or about 6 per cent of GDP.

But, Wignaraja said Indian anxieties over China’s footprint on the island were palpable. “Concerns have arisen that Hambantota Port — managed by a Chinese state-owned enterprise — may become a dual-use commercial/military facility. To reassure India, the Sri Lankan Navy has emphasised that it manages port calls made by foreign ships and security at Hambantota Port”. This relationship will see extensive management in 2021.

The one country with which India now enjoys an unparalleled rapport is the Maldives. Current President Ibrahim Solih has managed to undo at least part of the damage caused to Indian interests during the five-year reign of his predecessor, the China-leaning Abdullah Yameen. Earlier this year, India announced loans amounting to $250 million to the Maldives to deal with the economic impact of Covid-19. Within days, New Delhi started preparatory work on the expansion of Hanimaadhoo International Airport in the northern Maldives. This is billed as the largest infrastructure and connectivity project in that part of the country. While the project will formally begin in 2021 after tendering by the Maldives government, an Airports Authority of India (AAI) team visited the airport a few weeks ago for assessment and initial survey. The AAI team is preparing a Detailed Project Report (DPR) and will submit it within two months.

Though Bhutan is struggling with its border dispute with China, the government has assured New Delhi that its interests are safe. Vetsop Namgyel — the kingdom’s ambassador to India — intervened to allay fears that China had occupied a Bhutanese village, according to US satellite imagery provider Maxar Technologies in late October 2020. Although the nation’s economy and society are undergoing an upheaval following the Covid-19 outbreak, there is no indication that 2021 will bring any dramatic change in relations with India.

An unknown entity is Bangladesh: Which is subject to the pulls and pressures of domestic politics both in Bangladesh and India’s West Bengal and Assam. As the election campaign advances in both Assam and West Bengal, in the crosshairs will be the issue of migration from Bangladesh to India. While the sharing of river waters is considered a settled issue, this can become a political issue in a fraught West Bengal Assembly election campaign.

As the effect of the Covid-19 pandemic softens, 2021 is expected to be a year of consolidation in relations with the neighbours.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel