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As Asia’s two largest economies, both India and China have enjoyed strong trade and investment relations with their South Asian neighbors over the years. This sentiment applies not only to countries like Bangladesh, Sri Lanka or Nepal, but also to African island nations in the Indian Ocean such as Mauritius, Seychelles and Madagascar. These states have developed important economic ties with both India and China without being overly dependent on either. They have been able to adeptly demonstrate their ability to act in their interactions with India and China, both of which are engaged in geostrategic competition for influence in the wider Indian Ocean Region (IOR).
India considers these island nations part of its extended maritime neighborhood and has traditionally enjoyed close, multilateral ties. Indian interests in these countries were driven by a combination of security, cultural and economic overtures. As a developing country, India was aware of the special circumstances and challenges faced by these small island developing countries (SIDS) in their pursuit of sustainable development.
Therefore, as part of its commitment to South-South cooperation, and in conjunction with its growing great power profile, India has demonstrated its ability and willingness to help its neighbors to address common maritime and development challenges. Most of these initiatives have been in the form of development aid, investment in maritime and air connectivity, and initiatives such as the Initiative for Resilient Island States (IRIS).
On the other hand, China’s engagement with these three countries is mainly driven by economic reasons. Its heavy reliance on overseas resources and energy supplies, especially oil and natural gas, has played a key role in shaping China’s strategy and engagement in the IOR. All of these African island nations want to expand trade and investment ties with China as a way to develop their economies.
Approaches to development assistance
Development aid and assistance have been a key part of India and China’s rapprochement with African island nations. India’s approach has mainly been in the form of capacity building and training under India’s Program of Technical and Economic Cooperation (ITEC), lines of credit (LOC) or concessional loans, grant assistance, trade and investment.
Prime Minister Narendra Modi in Seychelles. Photo: MEA
India has sought to differentiate itself from China as a development partner by insisting that India’s approach to development is human-centred and that its development partnerships are characterized by respect, diversity, forward-looking and sustainable development. All Indian projects and their implementation methods are selected through a consultative process, keeping in mind local demands and sentiments. India’s development aid is completely unconditional and is not influenced by political or commercial considerations.
China, on the other hand, sees itself as the rule and norm for global development practices of the future. China has published three white papers defining its approach to foreign aid: in 2011, 2014 and most recently in January 2021. China’s latest white paper emphasizes an activist approach to multilateral rule-making and a normative turn away from the transaction-driven activities that characterized the first five years (2013- 2017) Belt and Road Initiative (BRI).
China’s development assistance insists on the principles of mutual learning, sustainability, lasting impact and breaking new ground, although various industrial economies have criticized the BRI for its lack of transparency, its ad-hoc nature, its tendency to push developing economies into “borrowing”. traps’, and allegations of corruption and unfair labor practices.
India is the largest development partner of Mauritius. In May 2016, the Indian government provided a special economic package of 353 million dollars to Mauritius for the implementation of five projects – the Metro Express project (275 million dollars), the Supreme Court building (30 million dollars), the new ENT hospital (14 dollars). million), a social housing project ($20 million) and the purchase of digital tablets for elementary school children ($14 million). Some other projects in Mauritius with Indian assistance include Upadhyay Training Centre, Subramania Bharati Eye Centre, Jawaharlal Nehru Hospital, Rajiv Gandhi Science Centre, Swami Vivekananda International Conference Center and others.
In Seychelles too, India has funded the construction of various national priority projects of Seychelles, including a new government house worth $63.66 million, a police headquarters worth $13.92 million and the attorney general’s office worth $13.38 million. India also extended a cash grant of $3.5 million in June 2017 for the construction of the Magistrates’ Court building. In Madagascar, India funded the construction of a new Center for Geo-Informatics Applications in Rural Development (CGARD) in 2018, along with many concessional LOCs to set up fertilizer plants, develop irrigation, farm mechanization and food processing projects.
Like India, China has also invested in building flagship infrastructure projects in Mauritius, Seychelles and Madagascar. In Mauritius, China has built the Jinfei Economic, Trade and Cooperation Zone (Jinfei Zone), which is essentially a smart city, in addition to a new airport terminal at the Mauritius International Airport worth 260 million dollars.
In the Seychelles, China built a new media broadcasting facility and the La Gouge Dam project built by Sinohydro Group Ltd to improve water security in the event of drought. In addition, many projects were built with Chinese grant funding, including the National Swimming Pool, the National Assembly Building, the Palace of Justice, Anse Royal Hospital, Glacis Primary School, a nursery and many other projects. And in Madagascar, China has helped build many economic and social projects, including the rehabilitation of RN2 (Moramanga-Andranonampango), the Sino-African Friendship Primary School, the Palace of Sports and Culture, the Anosiala Hospital and the International Conference Center in Ivato.
Sea and air connectivity
Both India and China are keen to expand cross-border connectivity with these African island nations. This approach manifested itself primarily in the form of connecting seaports and air traffic.
In 2015, India signed two important agreements for the construction of joint maritime facilities on Assumption Island and the $87 million airport and port development on Agalega Island, Seychelles and Mauritius. While the Agalega Island project with Mauritius is well underway, the Assumption Island deal with Seychelles has become embroiled in Seychelles’ domestic politics, where a combination of opposition and environmentalists have expressed concern over the island’s relative proximity to Aldabra Atoll, a UNESCO World Heritage Site. . This eventually led the media to report that the deal was ‘dead’ and would not move forward. The main concern on the part of Seychelles remains that there was no consultation with the local population on the deal with India on Assumption Island and that the deal would undermine the sovereignty of Seychelles.
In terms of air connectivity, there are direct non-stop flights connecting Mumbai and New Delhi to Seychelles and Mauritius. Although there are currently no direct flights to Antananarivo, Madagascar recently proposed a direct Air Madagascar flight from Antananarivo to Mumbai. On the other hand, China has a direct flight to Mauritius (Shanghai-Mauritius) and Air Madagascar flies indirectly from Guangzhou to Antananarivo via Reunion.
The way forward
India and China share a long history of strong relations with African Indian Ocean island states. While the security aspect of this relationship tends to garner the most attention, it is the trade and investment dimension that has the potential to propel both Asian powers to become Africa’s leading development partner.
Both India and China see these island countries as a destination to establish a manufacturing base to export their goods to mainland Africa. Countries like Seychelles and Mauritius, through a strategy of balancing and overlapping, have been able to exercise their agency and their ability to influence events, especially those concerning their own security and future.
In the future, India and China will continue to position themselves as the main development partners of these island states. This will be done through a mix of economic moves through investments, credit lines and security assistance.
Both will continue to fund the construction of high-impact community development projects, in line with the national priorities of these island states. How India and China try to increase their “soft power” and differentiate their development model from each other will affect the nature of their engagement in these Indian Ocean island states.
Abhishek Mishra is a Fellow in the Strategic Studies Program (Africa) at the Observer Research Foundation, New Delhi.
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