When the new government of Sri Lankan President Maithripala Sirisena decided to review every Chinese investment approved by the previous President Mahinda Rajapakse’s government – including the Colombo Port Expansion Project (CPEP) – many believed this would lay the groundwork for Sri Lanka’s China policy.

Indian observers keenly monitored developments to see if the CPEP would be approved, as a disapproval of the project would lead to probable closer relations with India. Much to India’s dismay, the Sri Lankan government approved the $1.4 billion project in April 2015, indicating that Sirisena’s foreign policy was going to be rather China-friendly.

Why Does China Invest in Sri Lanka’s Maritime Infrastructure?
China depends heavily on Africa and West Asia for its oil and gas imports. Beijing has revamped its policy to have strategic influence in the Indian Ocean Region (IOR) to reduce its dependence on the Malacca straits.

China’s cargo ships have tremendously increased in size to accommodate the growing trade. These state-of-the-art cargo ships require modern ports to handle logistics.

Sri Lanka receives a great deal of its revenue due to its strategic position in the Indian Ocean.  Economically Colombo would greatly benefit from the modernisation of its ports. China has a strong involvement in Sri Lankan ports; for instance, the re-structuring and revamping projects for both Colombo and Hambantota ports have been commissioned to Beijing. These ports will now be developed to accommodate the large-sized cargo vessels.

China is economically aggressive in its approach and invests wherever it can reap benefits from. Sri Lanka knows it needs to build on its strengths of occupying a strategic geographical position in the IOR. Thus, it’s a win-win situation for both countries.

But is this engagement solely an old-fashioned trade and economic exchange or are there ulterior motives to the Chinese economic activity? 

In September 2014, New Delhi was alarmed when Sri Lanka agreed to dock China’s warship and nuclear submarine at the Colombo port – that is controlled by a Chinese developer. Warship Chang Xing Dao and submarine Changzheng-2 arrived at the southern port of Colombo, supposedly for refuelling purposes. New Delhi raised concerns about Chinese influence in the Palk Strait, located in close proximity to the Indian coastline.  With the construction of these new ports, will India witness more Chinese warships and submarines at its doorstep in the name of anti-piracy rounds in the Gulf of Aden? 

To matters complex, India does benefit from the re-construction and modernisation of Colombo Port as over 70 per cent of India’s trading ships make halts at Colombo. This is due to an age old Indian policy that does not allow merchant ships to make more than one port call at a time on the Indian coast. These ships have to invariably go through Sri Lanka. This is due to the lack of facilities in our domestic ports and our outdated maritime policy.

Why India Needs to React
Most of India’s trade passes through Sri Lanka, which makes the latter a key component of ensuring India’s security. New Delhi’s inability to invest in Colombo and Beijing’s growing readiness is a matter of concern. There is an urgent need to modify our maritime policies in the light of the changing global maritime environment.

India may not undertake large commercial investments like China, but it invests on the lines of aid –unlike Chinese investments, which are in the form of loans.
  

Besides the construction of ports in Sri Lanka, the state-owned China National Electronic Import and Export Corporation (CNEIEC) has also undertaken the $103 million Lotus Tower project. The CNEIEC is involved in defence electronics and other military services. It is not difficult to believe that the Lotus Tower, the tallest in South Asia, will be used as a surveillance facility. This not only raises security concerns in India but also in the broader South Asian region.

India does not have the required investment capability to match or outbid the Chinese capacity, but is not investing hampering our security? There are also growing concerns due to the flourishing China-Pakistan bilateral.  India may be unable to, and will not, directly counter China. However, it could adopt a collective security mechanism along with other regional powers. This would be a much-needed pragmatic approach to counter China’s influence in the region.

Given the evolving geopolitics in the larger IOR, India has begun playing a more strategic role. There are great expectations from Indian Prime Minister Narendra Modi’s recently-concluded China visit, (that preceded his visits to Mongolia and South Korea). Is this India’s response to Chinese President Xi Jinping’s visits to India’s neighbours? Most countries in Asia are apprehensive about their relations with China. With China’s phenomenal rise, it is understood that they do not hesitate to exploit but India still maintains a more fair and peace-oriented image among its neighbours. With the Indian Ocean being an integral factor for security, it is time for Modi to apply his best diplomatic efforts with the rest of the Asian countries to bring about greater cooperation and security in the region before the string of pearls becomes a hangman’s knot.