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Sri Lanka today has become one of the pivotal points for the Chinese Belt and Road Initiative (BRI). No surprise that Xi Jinping visited Sri Lanka in 2014, becoming the first Chinese leader since 1986 to visit the country. Beijing is hopeful that it can leverage its increasing closeness to Colombo to strengthen its foothold in South Asia and the Indian Ocean region. China has been extending massive loans and investments to Colombo and has been heavily engaged in building infrastructure. In addition, Sri Lanka’s tourism industry is heavily dependent on China. Thus, it is no surprise that the warming relations seem to be directed at undermining New Delhi’s position. Wang Yi, during in January 2022 visit to Sri Lanka, called the country “the real pearl”.


India and Sri Lanka share longstanding cultural, economic, and diplomatic relations. However, the issue of the Tamil population in Sri Lanka and the Liberation Tigers of Tamil Eelam (LTTE) has affected this relationship adversely. Moreover, New Delhi’s limited resources and investments have made the Chinese investments all the more attractive. China has extended around 5 billion dollars in loans to Colombo for infrastructure projects such as ports, roads, etc. Sri Lanka is in need of infrastructural development, and the Chinese are keen to invest and deliver on their promises in this respect. It is no surprise that they have successfully constructed a number of infrastructure projects in Sri Lanka.


However, it has been constantly debated and discussed that these loans and projects undertaken by Beijing come at a major cost for the host nations. In the case of Sri Lanka, the case of Hambantota port is a very strong example and a red flag for the smaller nations getting enticed by Chinese investments. China has gained a 99-year lease on Hambantota. The failure of the Sri Lanka government to repay this loan has given Beijing the leverage of access to the port and it has come to play a strong role in dictating Sri Lanka’s domestic politics too, thereby highlighting some of the challenges of the ‘debt trap’.


In May 2021, the Sri Lankan Parliament approved the “Colombo Port City Economic Commission Bill”, which entails 269 hectares of reclaimed land; and it will bring in 15 billion dollars in Chinese investment and promises jobs. Even though this bill faces huge domestic opposition on the grounds of challenges to Sri Lanka’s sovereignty and environmental problems, it has been approved.


Beijing is also working towards making a dent in India’s closeness with the Sri Lankan Tamils. In December 2021, Qi Zenhong, China’s Ambassador to Sri Lanka, visited the Nallur Kandaswamy Kovil, a temple near Jaffna, a region dominated by Sri Lankan Tamils. Tamil region of Sri Lanka is perceived to be the reason why India has influence over Sri Lankan people. The visit indicates that Beijing is ready to work its influence over the Sri Lankan Tamils too.


However, China’s increasing influence in Sri Lanka became clear when, in January 2022, during his visit to Sri Lanka, the Chinese foreign minister Wang Yi made a statement arguing that no “third party” should get involved in China-Sri Lanka relations. It is very clear that the “third party” mentioned here is India. In addition to this, Beijing also proposed a “forum on the development of Indian Ocean island nations”, which one can argue is very similar to the Indian government’s SAGAR initiative (Security and Growth for All in the Region). However, after strong protests from New Delhi, China decided to relocate its plans for establishing hybrid technology plants on three islands of Sri Lanka to the Maldives. These islands were closer to Tamil Nadu. China argued that this decision was undertaken because of pressure from a ‘third party’.


It is no surprise that Global Times published an article where it quoted a Shanghai-based South Asian affairs expert arguing, “India has always taken neighboring countries such as Sri Lanka as its backyard, and our help in Sri Lanka will be regarded as China moving India's cheese, for China has been regarded as the potential enemy for India.”


Such statements and proposals underscore the Chinese ambitions in the Indian Ocean Region and South Asia. China has been extending loans not only to Sri Lanka but to other countries in the region too. These loans, which are much needed by these smaller nations, however carry increasing Chinese influence. A number of countries in the Indian Ocean region, especially Sri Lanka and the Maldives are strongly tilting towards Beijing. Sri Lanka under President Rajapaksha has completely leaned towards Beijing.


However, a total shift towards China is still not complete. This may be because New Delhi is still a stronger naval power in the Indian Ocean region. In addition, India is closer to Sri Lanka geographically and has strong people-to-people contact. India is still an important trading as well as a diplomatic partner of Colombo. The recent announcement by India that it would help Sri Lanka in its post-pandemic recovery and in tackling economic challenges may work in strengthening Colombo’s closeness with New Delhi.


However, the major question that needs to be answered is – what is the alternative route that these countries can follow? Beijing today provides them with huge access to finances, which can help these countries develop their infrastructure and in turn strengthen their economies. With the access provided, these struggling economies can gain a lot. But is it feasible in the long run? It has become quite clear that China will take its pound of flesh in return for the investments. In the case of Sri Lanka, there are already debates around its sovereignty and China influencing domestic politics. One cannot undermine the Chinese presence and zeal to make inroads in South Asia; and the island countries provide a good platform for Beijing’s naval aspirations. But will these smaller nations be happy being a pawn in China’s larger ambitions?


If one wants to look for an alternative, it is clear that India cannot match with the Chinese level of engagement when it comes to extending loans and funds. India is a developing country and is a key player in the South Asian and Indian Ocean region. India is also one of the larger nations in the region that has a disputed border issue with Beijing. With this backdrop, it is inevitable that New Delhi is constantly on guard with regard to Chinese aspirations in South Asia. However, India tends to delay most of its commitments in the region. There is a need to tighten its working style and learn to deliver on its promises.


Competition for influence and presence in the Indian Ocean region will become one of the major points of global power play. With China and India both rising and becoming stronger, they will both tussle to gain more access to countries in the region. China has always been uneasy with the term ‘Indian’ Ocean region by arguing that this is not India’s Ocean. The smaller nations will be the ground on which this power play unfolds. It remains to be seen as to what these smaller nations can gain out of the ambitions of both Beijing and New Delhi.


Disclaimer: The views expressed in the article are personal.