India and the BRI | Chinese Checkers

India should regain its strategic position as an ally of the Maldives

Smruti D

On 24 January 2019, China honoured the ambassadors of Pakistan, Sri Lanka, the Maldives, Malta and Bosnia-Herzegovina with ‘Super Ambassador Awards’ for their contribution to the Belt and Road Initiative (BRI) in Beijing.

The BRI, which is China’s ambitious project, aims to build major infrastructural projects with Chinese investments around the world via the ancient silk route. India has a problem with China-Pakistan Economic Corridor (CPEC), a flagship project under the BRI as it cuts through Pakistan Occupied Kashmir (PoK). China has made huge investments in the Maldives as part of its development programme which had made the Maldives join the Chinese camp.

Prime Minister Narendra Modi with former Maldivian President Abdullah Yameen during a meeting at Hyderabad House, New Delhi

While it was former Maldivian president Abdulla Yameen Abdul Gayoom who signed the Free Trade Agreement (FTA) with China in 2017, it was former president Mohamed Nasheed’s government in 2011 that allowed the Chinese to open their embassy in Male. India had signed a preferential trade pact with Maldives in 1981, as per which, India supplied essential commodities and other goods to Maldives without restrictions and in return Maldives could export to India. Tuna fish was one of the many export items.

Through FTA, as Chinese goods make their way into the Maldivian market, India fears that they would make their way into the Indian market by a way of re-export.

Chinese presence in the Maldives means its presence in the Indian Ocean Region (IOR). Maldives’ northern-most islands are closest to India’s southern peninsula. The Chinese building its strategic bases in that area would mean direct interference with India. Similarly, Yameen’s government had started to do away with Indian presence from its Southern atolls where China has a number of investments and has also built the Male and Hulhule real estate projects in Hulhumale and the Laamu atoll. This would ensure a strong vigil and access to the 1.5-degree channel which is an important area for a coverage of the Indian Ocean.

China and Maldives have announced the construction of the Joint Ocean Observation Station, a planned maritime observatory to be built on Makunudhoo, the western-most atoll of Maldives. India’s concern here is that China would use it for military purposes against India.


Maldives and India

It was during former president Abdulla Yameen’s regime that a discomfort had crept up between the two countries. Male was downplaying India and favouring China by letting them take up large-scale projects like the airport project which an Indian company, GMR, had won a contract for and was worth USD500 million.

Historically, India and Maldives have enjoyed cordial relations. India was among the first countries to have formed diplomatic relations with the Maldives after they won independence from the British in 1965. Seven years later, in 1972, India established its mission in Male.

India and Maldives share cultural and linguistic similarities and Maldivians come to India for education, medical treatments, business or tourism. Similarly, thousands of Indians have been working in the Maldives for decades. The Maldives is one of the few neighbours that India does not have any border dispute with.

On the economic front, India exports medicines, textiles, agriculture and poultry produce to Maldives worth USD100 million.

Geographically, Male is closer to India than the Indian Union territory of Andaman and Nicobar islands. Haa Alif is located closer to Minicoy part of southern Lakshadweep than it is to Male. Dhivehi, which is the national language of Maldives, is spoken in Minicoy too. Interestingly, Maldivians are exempted from travel restrictions in Minicoy while Indians are not.

However, it was only during Yameen’s term that Indians living there faced difficulties and feared being jobless. The Maldives had and continues to have an India-First policy, which the Yameen-led government systematically tried to change to give way to China. Visa renewal was stalled and work visas were denied.

Indo-Maldivian relations started under former prime minister Indira Gandhi’s regime with diplomatic visits and signing of agreements. Since then India has provided the Maldives help in whichever area it was required at different times. In November 1988, a large group of 80-200 militants belonging to the People’s Liberation Organisation of Tamil Eelam (PLOTE), supported by the Maldivian businessman Abdulla Luthufi, threatened a coup in the Maldives. After infiltrating the capital, the militants spread out and seized other key areas in the city in an attempt to overthrow the then President Abdul Gayoom. He escaped and took refuge in the National Security Service Headquarters.

The leadership then reached out for help to many countries including India, Pakistan, Sri Lanka, Malaysia, the United States and Britain.

India immediately dispatched troops to the Maldives in less than 16 hours of President Gayoom’s request and took the shortest response time. Indian troops found themselves lucky as the PLOTE militants had not seized the Hulhule airport. Indian troops then entered Male and rescued President Gayoom while the militants tried to escape in a small vessel which was blocked by the Indian Navy. Although the mercenaries evaded arrest that day, Indian Marine Strike Force (now known as the Marcos) succeeded in taking over the vehicle. Maldivian president staked claim to the chair again. The day  came to be known as Victory Day and is celebrated on November 3 every year. This operation was the beginning of the Indo-Maldivian relations and the important role that India assumed in the years to come to maintain security in the region.

When Gayoom held office, India gave the Maldives economic aid and the Maldives even saw a large influx of Indian professionals in a variety of fields, who played an important role in the Maldivian economy and society. Even after Nasheed was elected as the president in 2008, India had managed to maintain good relations with the country.

It was in 2009 that then Indian defence minister A.K Antony visited the Maldives with a team of naval experts and signed an agreement for the two Dhruv Advanced Light Helicopters (ALH) along with its operating crew for the assistance of Maldivian military. An agreement for Coastal Radar Surveillance System (CSRS) to monitor the 26 atolls to give a comprehensive picture of all maritime traffic was also signed. The project, however, faced certain issues because of the ouster of President Nasheed. The work for setting up the CSRS agreement was later resumed. It was later inaugurated by Prime Minister Narendra Modi and Maldivian President Ibrahim Solih. The 2009 meeting also allowed the induction of Maldivian military teams to visit the tri-services command in Andaman and Nicobar Islands to learn security management.

In 2013, India gifted the Maldives two Dhruv Advanced Light Helicopters. In 2018 Yameen asked India to take back those helicopters along with about 28 members of the navy as operation crew. The reason given was that they wanted Dornier maritime surveillance aircraft instead. It was later when the new government came to power that the two helicopters were retained by the Maldives.

After becoming the President, Yameen started to imprison his political opponents. Matters, however, turned serious when the Supreme Court passed a unanimous judgement ordering the release of political leaders including former President Maumoon Abdul Gayoom, who is also Yameen’s half-brother. It was after this judgement that Chief Justice Abdullah Saeed and one other judge, Ali Hameed, were arrested. The remaining three judges were made to amend the order and revoke the release. Yameen then declared a national emergency.

In 2014, even after there was considerable Chinese influence, India helped the Maldives come out of a peculiar situation. In December that year, the country’s desalination plant collapsed and it resulted in acute water shortage. They then called upon India, who sent help in form of 200 litres of freshwater in its heavy lift aircraft, C-17s, IL 76s and additional 35 tonnes of freshwater using the onboard desalinisation plants of INS Deepak and INS Sukanya.

The latest example of India’s help was during Covid-19 outbreak in March 2020. A 14-member Indian defence medical team, including doctors and paramedics, helped in setting up medical centres that could function as quarantine facilities. Various other facilities like medical supplies, testing equipment and sanitisers among other things were also dispatched.

In November 2018, after the Maldives elected President Ibrahim Solih, Prime Minister Modi was the only world leader who was invited to the swearing-in ceremony, symbolising a ‘new era’ in the Indo-Maldivian geopolitics. In 2019, when PM Modi returned to power, he visited the neighbouring countries including the Maldives after which a joint statement released by the two leaders said, “In recognition that the security interests of both countries are interlinked in the region, they reiterated their assurance of being mindful of each other’s concerns and aspirations for the stability of the region and not allowing their respective territories to be used for any activity inimical to the other.”


China and the Maldives

When Maldivian delegates visited India in December 2019, their statements were reflective of Maldives’ intentions to control the damage that the two countries had faced over the past few years.

Minister of foreign affairs Maldives Abdullah Shahid had said that India and the Maldives had “seen a downward swing due to irresponsible policies of the previous government” and that it had “tried to play India and China against each other, which was a childish policy.”

Although this came as a damage-control statement as the Maldives in the recent past had played India down and favoured China, Shahid said that while their relation with India was “based on principles”, “China had been very generous.”

Maldives owes China approximately USD1.4 billion from the ‘social development’ projects that China had undertaken in Maldives. Some of the major projects include a USD830 million worth of an overhauling of the Maldives airport and building of a 2km long bridge to link the airport with Male. A 25-storey apartment complex and hospitals in Maldives are also being constructed and an increasing number of Chinese tourists have started to come to Maldives.

Before China got in the way in 2009, India was leading the development in the Maldives. It built institutions like Indira Gandhi Memorial Hospital (IGMH), Faculty of Engineering Technology (FET) and India-Maldives Friendship Faculty of Hospitality & Tourism Studies.

The FTA that the Maldives signed with China in 2017 commits both sides to reduce tariffs on more than 95 per cent of goods to zero. This came as a shocker to India as the Maldives had first decided on signing the deal with India.

Former President and Speaker of People’s Majlis of Maldives, Mohamed Nasheed, who was in India in December 2019 had said that the loan of USD 1.4 billion was only the G2G loan. The private loans and sovereign guarantees that the Maldives owes China adds up to a debt of USD3.5 billion. “Our GDP is about USD5 billion but in 2022, we will have to pay China USD700 million,” he said. According him, it is a huge challenge for the Maldives to pay back the loan. He also accused China of inflating project costs in the name of development. The present regime cannot afford to stop construction projects cleared by the previous government as they would remain half-done and would be the “bigger white elephant”.

He further added that the Chinese economic issue was also a human rights one and alleged that, “It’s also an issue of sovereignty and freedom.” He also requested the Indian authorities to expedite the process of granting USD1.5 billion credit line that India had said it would give.

China has been criticised for sly political gains through huge financial debts that smaller countries would incur.

Even as the political drama that unfolded under Yameen crippling Maldives’ democracy, India urged them to return to the path of democracy whereas China kept pressing that it was Male’s internal affair and warned India against its interference.

The Chinese investments are detrimental to Maldives. A report by the Reuters news agency in 2018 quoted the Center for Global Development, a Washington D.C.-based think-tank as stating, “The Maldives, a small economy heavily reliant on tourism, is one of the most at-risk countries of any involved with the BRI to the distress of debt.” said the tracking the initiative.” The report further said that Scott Morris of the Center for Global Development had said that China’s loans gave it a dominant role. “That raises concerns to have such a dominant role being played by another government,” Morris told Reuters. “You have to think about what happens in a case of distress – who calls the shots in that situation. China is not bound by the kinds of standards that other major creditors are.”

President of Maldives Ibrahim Solih with his wife Fazna Ahmed, President of India Ram Nath Kovind with wife Savita Kovind and Prime Minister Narendra Modi at Rashtrapati Bhavan, New Delhi


Why is Maldives Important?

The Maldives holds a strategic geographical position which allows dominant Asian countries like India and China to have a stronghold over the IOR. Sea Lanes of Communication (SLOCs) facilitate huge economic growth via trade. The Indian Ocean comprises critical SLOCs or choke points which connect the major oil exporting countries with Europe and provides a channel for 83 per cent of India’s crude oil trade and more than 95 per cent of India’s international trade. Two-thirds of world’s oil, a third of the bulk cargo and half of all container traffic passes from this region. China, too, is dependent on the SLOCs for its overall trade.

The Maldives and India’s Lakshadweep island belong to the same archipelagic chain that the British Indian Ocean Territory of Diego Garcia and the Chagos Archipelago belong to.

To have the Maldives under its influence as it is just 700 kms away from the Lakshadweep Islands and 1200 kms from mainland India. If India fails to retain its friendship with the country, it would encourage extremism, religious fundamentalism, smuggling and strong political disagreements within political parties. The IOR houses more than 40 per cent of the world’s population and stretches far and wide till Australia, Southeast Asia, South Asia, West Asia and eastern sea bend of Africa.

Although India has a dominant presence in the Indian Ocean, the growing Chinese presence is worrisome because it would bring China close to Lakshadweep and neutralise Indian presence in the ocean, thus threatening security. With China obtaining naval basing rights in Djibouti, East Africa, building a port in Gwadar in Pakistan, trying to create bases in countries like Myanmar, Bangladesh, Sri Lanka and the Maldives, it only threatens India’s space in the region.

The IOR has become a bone of contention around the world as China is on a rampage to increase its economic and military footprints in countries along the route.

As a South Asian power, India is the regional net-security provider to multiple countries like the Maldives in the IOR and it needs cooperation from security and defence perspectives from these countries, including the Maldives. Addressing concerns that may be common provides a robust network in maintaining security mutually by including activities like capacity building, military diplomacy, military assistance and direct deployment of military forces. Regional stability is important for the preparedness and being cost-effective. For India cooperation would go a long way rather than competition in the IOR. Regional stability or instability predominantly affects national economy too.

Commander in Chief (retd), Western Naval Command Shekhar Sinha says, “It is very natural for any small country to hedge between two big countries depending upon what favours them at what time. It always works to their advantage. India is too big whereas all the Indian Ocean countries are too small. So, India is powerful economically and militarily in this region. China, which actually doesn’t belong to this region, has managed to influence countries in the Indian Ocean due to its economic might. Whenever the Maldives has been in grief, be it due to manmade disaster or natural disaster, it’s always India which has helped. In the process of hedging, China has realised that worldwide, and particularly South Asia which comprises poor countries, has heads of states who are open to corruption. So, if it puts money in their personal bank accounts or bribe them heavily, they tend to agree and compromise on national security in the long run. This is the same thing that happened with the Maldives.”

Sinha adds that Yameen was one such leader who let China take up various projects at high interest rates. China also has all its economic projects in a manner that helps them win security. In the Indian Ocean, they were looking for places that could help them counter Indian growth and could also counter India’s actions against Pakistan. As a result, they got projects sanctioned in some of the islands which were further to South of Male and some projects they wanted to do North. In North, there are many islands that are closer to Minicoy. The northern-most island in the Maldives is just 140 kms away from Minicoy, which is a matter of concern.

“The Chinese always start with some development projects but the radar projects that they would use are of high power which can actually monitor all the aerial movements on the southern peninsula of India. The local perception was also changing in the Maldives where people were getting quite upset that lot of land was being given to China at throwaway prices. They were getting worried that their sovereignty could be a question in the future.” After Solih became the President, they have been opposing the projects that the Chinese had grabbed in pittance and therefore, they decided to relook at them. But as these projects come with contracts, one has to abide by them or pay penalties. So now although those projects have to be done, there are no fresh projects being given,” he says.

Talking about the safety concern of the India Navy, he says that the moment they put surveillance systems on any of the islands the movement of all our ships, submarines and aircraft will be known to them which they will pass on to Pakistan. In case of a war like situation no country wants to be shadowed or followed and it can restrict the movement and cause danger to secrecy. He adds that now no basing of ships and submarines will happen without India’s consent as agreements to that level have been signed. VAdm. Sinha is of the opinion that although the damage has been done, the future looks alright.


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Interdependent Neighbours

For years, the Indian foreign policy experts viewed China through the lens of encirclement. The theory of ‘strings of pearls’ was propounded to explain People’s Liberation Army Navy’s (PLAN’s) forays into the Indian Ocean Region (IOR). Here China cultivated a series of friendly ports all along the islands in the IOR to further enhance the endurance of its naval vessels. Indian experts argued that all this was aimed at encircling India and restricting the Indian Navy.

However, with the launch of the Belt and Road Initiative (BRI) in 2013, China has taken the ‘string of pearls’ theory to an entirely new level. It is no longer about encirclement of any one country, but creation of multiple modes of connectivity across the world — land, sea and digital — for greater cooperation. But can this cooperation be without conflict? This is the question that the world, including India, is grappling with.

This month onwards, FORCE starts a series in which it will look at India’s ties with the countries that have signed up for the BRI. This edition we start with Bangladesh.


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