After the visit

Sri Lanka – China relations after Xi Jinping’s visit and the implications for India’s Sri Lanka policy.

Within the last month, Sri Lanka has received attention from some prominent Asian visitors. Japan’s Prime Minister Shinzo Abe travelled to Sri Lanka in early September, marking the first Japanese head-of-state visit in 24 years. In early October, India’s Defence Secretary participated in the second Defence Dialogue with Sri Lanka. Yet the most high-profile arrival was President Xi Jinping, who made a historic first visit by the senior-most leader of China to the island nation.

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Xi spent a whirlwind 24 hours in Sri Lanka—and before that, Maldives—before leaving for a trip culminating in India to meet the new Indian Prime Minister Narendra Modi. While Xi’s trip to India was of greater geopolitical significance, his visit to Sri Lanka typified the various successes of the bilateral relationship over the past decade. Given this backdrop, what are some considerations for New Delhi as the new administration begins to craft policy towards its southern neighbour?

There are three key takeaways from Xi’s trip to Sri Lanka. First, Sri Lanka’s commercial relations with China are thriving. Both Xi and President Mahinda Rajapaksa signed over 20 agreements between their countries. The most significant was a memorandum of understanding to work toward a free trade agreement, which incidentally India has long had with Sri Lanka. Xi launched the final phase of the Norochcholai power plant and inaugurated the Port City in Colombo—both of which are being built by Chinese state-owned enterprises. Through Beijing’s support of various infrastructure projects—a sea port and airport in Hambantota, a terminal in Colombo port, and highways connecting key cities—bilateral commercial relations continue to intensify.

Second, the agreement signed during Xi’s visit for building Phase II of Hambantota port may not have been negotiated by Sri Lanka from a position of strength. A new report by Sri Lanka’s Sunday Times suggests that Colombo’s difficulty in repaying its infrastructure loan is resulting in Beijing relaxing the terms of the loan in exchange for gaining operating rights to four container berths being built at Hambantota port. While a Chinese company already has operational control of its terminal in Colombo—one of the busiest ports in South Asia—and Indian car manufacturers benefit from using Hambantota for transhipping vehicles to destinations in Africa, South America, and Eastern Europe, India is historically sensitive to the potential for foreign use of Sri Lanka’s ports. New Delhi will therefore track the strategic implications of this development, but should also see where it may be able to assist Colombo so as not to fundamentally alter its security calculus.

Third, although defence ties did not come up as a major issue during Xi’s visit, China will continue to engage in normal security cooperation with Sri Lanka. A prominent example was Beijing’s August 2013 installation of the first defence attaché in its embassy in Colombo. Port visits by Chinese navy ships transiting Indian Ocean sea lanes are an ongoing reminder that China’s presence in the region will be a fact of life for the foreseeable future. Ahead of Xi’s visit, a Chinese submarine paid its first-ever Indian Ocean port call at Colombo—and to a Chinese-built terminal—which was a subject of major discussion. The submarine will likely make news again when it returns to Colombo for replenishment on its way home.

Given these themes and developments in Sri Lanka’s relations with China, what are the implications for India’s Sri Lanka policy? First, South Block is increasingly realising that unless India is receptive to infrastructure investment requests from its neighbours or provides hefty loans and lines of credit, as it has begun providing smaller South Asian states, leaders from these countries will accept offers elsewhere. India should redouble efforts to finance and build regional infrastructure, and in a timely manner, so that China will not be seen as the primary, attractive option for funds. Furthermore, Sri Lanka and other smaller South Asian countries are eager to diversify their sources of investment in order to reduce their reliance on a single country like China; Indian companies would also benefit through profit and project experience.

Yet even though India needs to bolster its overseas infrastructure investment and construction capability, it still comfortably holds the strongest political and military position in its neighbourhood. China is nowhere close to challenging India’s regional pre-eminence in this regard. India has intensified its security relationship with Sri Lanka through the establishment of the Annual Defence Dialogue in 2012. Despite the UPA government’s postponement of the follow-up meeting due to the 2013 UN Human Rights Council (UNHRC) resolution on Sri Lanka, the second iteration has been resurrected under the Modi administration and both countries’ defence secretaries recently met in Colombo. Other areas of defence cooperation include India installing a second defence official in its Colombo embassy over the summer and the completion of two naval exercises, including staff talks. In late October, Defence Secretary Gotabaya Rajapaksa completed a visit with Defence Minister Arun Jaitley in New Delhi, reportedly securing two offshore patrol vessels. Moreover, India and Sri Lanka signed a 2013 maritime security accord with Maldives, which encompasses far-reaching trilateral cooperation on maritime domain awareness, search-and-rescue and oil-pollution response activities, and coast guard exercises.

In terms of the diplomatic relationship, India will continue to walk a careful line in responding to the interests of its citizens in Tamil Nadu regarding their brethren in Sri Lanka. New Delhi supported the UNHRC resolutions on Sri Lanka in 2012 and 2013; however, in 2014 it abstained due to the belief that the proposed UN investigation was intrusive. To what extent the Modi government will advocate for interests on behalf of the Tamil populations in Sri Lanka, especially ahead of a UNHRC vote in 2015, is an open question. China, for its part, will continue to be a reliable supporter of Sri Lanka in international diplomatic forums such as the UNHRC. During his visit, Xi repeated standard language about shared commitments to issues of sovereignty and territorial integrity.

On balance, Sri Lanka’s ties with China are thriving, but its ties with India are deeper and more entrenched. The new Modi government appears to give the public impression of wanting to move forward on working with Sri Lanka and President Rajapaksa. In fact, the two leaders have met twice so far. New Delhi will likely apply private pressure on Sri Lanka over the devolution of powers in the Tamil-majority regions of the country in the hope that this manner of outreach may be more effective in producing results from Colombo than public pressure by Western countries. Meanwhile, the Rajapaksa government will continue to be responsive to Indian leaders when concerns inevitably emerge over activities with China, given the long history of India’s predominance in the region and comparatively more robust bilateral cooperation. While the JR Jayewardene government in the 1980s is often considered to have not taken India’s concerns about Sri Lanka’s foreign engagement seriously enough, the current government seems to place a priority on carefully managing Sri Lanka’s vital relationship with its large neighbour to the north.

Photo: fdecomite