Chinese investment

India Is Open to Doing Business With Chinese Companies, Says Rajeev Chandrasekhar

‘We are open to doing business with any company anywhere as long as they are investing and conducting their business lawfully and are in compliance with the Indian laws,’ said the minister of state for electronics and IT.

New Delhi: Despite border tensions with Beijing, India is open to doing business with Chinese companies, Rajeev Chandrasekhar, minister of state for electronics and information technology, told Financial Times.

“Is India open to doing business with Chinese companies?” Financial Times asked Chandrasekhar in an interview. “Of course we are,” he said.

“We are open to doing business with any company anywhere as long as they are investing and conducting their business lawfully and are in compliance with the Indian laws,” he added.

“We are open to all investment, including Chinese,” he said.

Chandrasekhar’s remarks come even as the Narendra Modi-led government has been trying to cut India’s reliance on China. However, several studies have found that Chinese goods are not only critical across various sectors, but in some cases “preferred” by Indian manufacturers.

Also read: Tech, Infra, Scale: The Challenges Hindering India’s Transition From the ‘Made in China’ Tag

A hurdle to Chinese expansion amid political tensions

After the 2020 Galwan Valley incident – which killed at least 20 Indian personnel, including a Colonel – India banned several Chinese apps, including TikTok, WeChat and Cam Scanner.

This was the deadliest border clash with China in 45 years, which led to months-long military standoff with the nation.

However, despite frosty relations, India has not been able to cut its dependence on Chinese imports.

The FT report noted that “India also tightened its policy on foreign investments from bordering countries, which are now required to seek central government approval.”

Chandrasekhar insisted that the process did not target China individually and applied to other countries “in the neighbourhood” including Pakistan, Bangladesh and Nepal”, the report noted.

“The concept of trusted hardware, trusted equipment, a trusted electronics ecosystem all came to the fore around that time,” he said.

“I don’t think it’s anything very unique or to do with Galwan as much as it is a general trend of countries of the world waking up to the concern of having their backbone networks, tech ecosystems not necessarily trusted.”

This also comes amid India’s clampdown on Chinese FDI; 58 Chinese FDI applications have been turned down since the financial year 2020-21, with rejections touching an all-time high of 33 in FY22, reported Business Today.

Only three investment proposals from China have received a go-ahead from India, the report said.

Additionally, India has rejected Chinese carmaker BYD Co.’s proposal to build a $1 billion electric-vehicle plant in partnership with a local company, Bloomberg reported, citing people with knowledge of the matter.

Despite reports on the rejected proposal, a person with direct knowledge of the situation told FT the application was “pending [and] still valid”.

Luxshare, a significant Chinese supplier to Apple, has applied for permission to build a factory in India with a domestic partner, the FT report said, citing people close to the company and Indian government officials.

Indian officials said the project had not yet been approved, the report added.

Amidst Clamour for Boycott, Maharashtra Suspends Three Chinese Projects

The Mumbai Metropolitan Region Development Authority also cancelled the bidding process for 10 monorail rakes as both the bids received were from Chinese companies.

New Delhi: The state government of Maharashtra has put on hold three agreements totalling over Rs 5,000 crore signed with Chinese companies at the recently held Magnetic Maharashtra 2.0 investor meet, according to a report in the Times of India.

“The decision has been taken in consultation with the Union government. These were signed prior (to the killing of 20 Indian soldiers on the Indo-China border). The ministry of external affairs has advised not to sign any further agreements with Chinese companies,” industry minister Subhash Desai said.

The decision to freeze Chinese projects and scrutinise investments from China has come against the backdrop of border clashes. At an all-party meeting, Maharashtra chief minister Uddhav Thackeray said, “India wants peace but that doesn’t mean we are weak. China’s nature is betrayal. India is mazboot not najboor (India is strong, not helpless),” he said.

The online conference of Magnetic Maharashtra 2.0 investor meet, held last Monday, had been attended by Chinese ambassador Sun Weidong.

The agreements included a Rs 3,770-crore memorandum of understanding (MoU) with Great Wall Motors (GWM) to set up an automobile plant near Pune. GWM planned to produce electric vehicles and SUV models at the unit in Talegaon near Pune. The managing director of the Indian subsidiary of GWM, Parker Shi, said in a statement that the plant would be “highly automated” with “advanced robotics technology integrated in many of the production processes”.

“Overall we are committed to USD 1 billion (Rs 7600 crore) of investment in India in a phased manner, which is directed towards manufacturing world class intelligent and premium products, R&D centre, building supply chain and providing jobs to over 3,000 people in a phased manner,” Shi said.

Also read: Railways Cancels Rs 471 Crore Contract With Chinese Firm Over ‘Poor Progress’

In a joint venture with Foton (China), PMI Electro Mobility had announced a Rs 1,000-crore unit that was likely to create 1,500 jobs.

The investor meet was a part of the Maha Vikas Aghadi government’s attempt to stimulate the economy after the slump caused by the COVID-19-induced lockdown.

The state industry minister said that overall 12 agreements had been signed, which included companies from Singapore, South Korea, US in addition to several Indian companies. Desai also said the government was processing the other nine MoUs.

Additionally, Mumbai Metropolitan Region Development Authority (MMRDA) cancelled the bidding process for the design, manufacture, supply, testing and commissioning of 10 monorail rakes as both bids received were from two Chinese manufacturers – China Rail Road Corporation and Build Your Dream.

“In the current economic situation due to COVID-19 and in line with the various policies announced by the government of India to encourage the Make in India schemes, it has been decided to look for an Indian Technology partner for development and long term support,” R.A. Rajeev, metropolitan commissioner, said in the statement.

“It has been also decided to initiate the dialogue with Indian manufactures like BHEL, BEML, etc.,” the metropolitan commissioner said. “MMRDA does not want again to create a Scomi-like situation when it has to depend upon foreign manufacturers even for spare parts of monorail coaches. In the situation that the two Chinese companies are dictating us to change tender conditions, MMRDA administration has decided to search for technology partners in India and develop it in India. As we do not require large quantities, it is possible for Indian companies to manufacture and supply in less time.”

Against rising clamour to boycott Chinese products, several states across the country have taken to reviewing and cancelling contracts with Chinese companies.

Bihar chief minister Nitish Kumar at the all-party meeting called by PM Narendra Modi said that all previous trade agreements must be reviewed “to ensure that Chinese products are not used”. Bihar industry minister, Shyam Rajak, however, said that any foreign firm investing in the state had to get clearances from the Centre, according to a report in the Hindustan Times.

Watch | Is it Feasible for India to Boycott Chinese Products?

Uttarakhand on Sunday also instructed its officials to list out all the Chinese companies which had been given government contracts. The spokesperson Uttarakhand government Madan Kaushik said that officials were directed to check whether the authorities in the state government have signed any contracts with Chinese authorities or companies in the past.

“The decision to ban Chinese companies can only be taken by the Centre. Why doesn’t the BJP government snap all trade relations with China? Moreover, no Chinese company has base in West Bengal,” said Dola Sen, a TMC Rajya Sabha MP and president of the TMC’s trade union wing.

What Does Being ‘Vocal about Local’ Mean for India’s Global Trade Strategy?

The resolve to boost domestic manufacturing is commendable, but there should be no confusion when it comes to New Delhi’s support for economic globalisation.

No matter what the spin-doctors might say, Prime Minister Narendra Modi’s recent sales pitch of ‘vocal about local’ – the Indian equivalent of US President Donald Trump’s ‘America First’ – is an endorsement of his government’s populist nationalism in matters of economic globalisation and international trade.

When Modi romped to a massive and decisive victory in 2014, neoliberal globalists believed that India would unflinchingly embrace globalisation and undertake economic reform by the courage of conviction, not by stealth. Indeed, at global forums, Modi often batted for economic globalisation.

In his 2018 speech at the World Economic Forum at Davos, Modi slammed rising trade protectionism. Unlike other populist leaders like Trump, Modi did not defy the international economic global architecture dotted by multilateral institutions like the World Trade Organisation (WTO).

Rising protectionism

However, at home, his government has been deviating from the path of trade liberalisation on which India embarked in 1991. The late Arun Jaitley, in his 2018 budget, admitted to this when he made a “calibrated departure” from the decades-long policy of cutting tariff rates.

Finance minister Nirmala Sitharaman took this legacy forward by raising tariffs on several products to shield the domestic industry. She also mooted a potentially WTO-inconsistent amendment to the Customs Act of 1962, giving the government the power to ban the import or export of any good (not just gold and silver as it applied earlier) to prevent injury to the economy. The logic behind increasing tariffs on imported goods is to provide an assured demand for locally made goods. However, many of these goods may be used as inputs by the domestic industry, thus increasing the costs for domestic industry.

Also read: Why the Economic Crisis Shouldn’t Become an Opportunity for More GDP Talk

The recent amendment of the foreign investment rules by India so as to discourage Chinese investment in India – something that may not be consistent with India’s WTO obligations – also smacks of protectionism.

Was it because of this rising protectionism and fear of global competition that India chickened out at the last minute from joining the 16 member strong Regional Comprehensive Economic Partnership (RCEP) agreement? In the last six years, India has not signed any worthwhile free trade deal. ‘Vocal about local’ epitomises this trade protectionism and pushes a flawed and oversimplified economic logic that domestic manufacturing can be resurrected by actively encouraging (even forcing) customers to buy products ‘made in India’. So police canteens including that of the paramilitary forces have been directed to only sell goods ‘made in India’. Likewise, the central government has decided that it will not buy goods or services valued less than 200 crore rupees from global companies.

The resolve to augment domestic manufacturing in India – which despite the high-octane ‘make in India’ campaign for the last six years has remained almost stagnant – is praiseworthy. However, the policy measures adopted to achieve this goal are unsound as they mark a relapse to protectionism. India’s economic experience of the first four decades after independence amply demonstrates that a protectionist and a highly controlled economic model do not yield a competitive and proficient manufacturing sector.

A worker operates a hydraulic press machine at a workshop manufacturing flanges for automobiles in Mumbai, India, May 29, 2017. Photo: Reuters/Shailesh Andrade

Moreover, the government should remember that consumers (those who buy finished products or industrial users) in a marketplace act as rational utility maximisers looking for the best return on their money. To cast a ‘nationalistic’ obligation on them to boost domestic industry instead of undertaking reforms that would improve domestic industry’s competitiveness is fallacious. Moreover, to expect the world to buy goods ‘made in India’ when we close our markets to foreign goods would be like living in a fool’s paradise!

Backlash against economic globalisation

In openly encouraging people to buy locally made goods, the prime minister is not only advocating discrimination against imports but also sowing seeds for a backlash against economic globalisation. As economist Dani Rodrik argues hyper globalisation has led to a political backlash in the West because there is a huge group that identifies itself as ‘losers’. But, this is not true for countries like India. According to the International Monetary Fund (IMF), India has been one of the beneficiaries of economic globalisation. After integrating with the global economy, India witnessed unprecedented prosperity.

According to World Bank data, India’s Gross Domestic Product (GDP) in 1960 was a mere $37 billion, which increased to a modest $270 billion by 1991 – a pretty flat rate of increase. However, after integrating with the global economy in 1991, India’s GDP galloped from $270 billion to $2.719 trillion by 2018 – a quantum jump and a very steep rate of increase that helped India pull millions of people out of poverty. This is not to suggest that GDP is the only indicator to measure prosperity or that problem such as rising income inequalities in India don’t matter. But, an increase in a country’s national income is critical as it provides the much-needed resources to pursue social and economic development.

Also read: India Faces a Major Economic Catastrophe, PMO Can’t Handle By Itself, Says Raghuram Rajan

Roots in Hindutva ideology

This faulty economic logic that might take India back to the pre-1991 import substitution era has its roots in the Hindutva ideology of the Sangh Pariwar that champions ‘swadeshi economics’. V.D. Savarkar, the most prominent Hindutva ideologue, believed in swadeshi and argued that “every step must be taken by the state to protect national industries against foreign competition”.

Deen Dayal Upadhyay, another Sangh Pariwar’s influential thinker, in his thesis ‘integral humanism’ championed swadeshi. Discarding both socialism and capitalism, as western concepts not suited to India, he argued that the use of “foreign articles” and overdependence on “foreign aid” (in modern parlance this will be foreign investment) is not “the road to progress and development”.

Dattopant Thengadi, another instrumental RSS thinker, taking a clue from Upadhyay, advocated for a ‘third way’ of economic development between capitalism and socialism. Thengadi opposed India joining the WTO and criticised Prime Minister Atal Bihari Vajpayee’s economic policies. These obscure economic approaches reek of a certain kind of populism that views international law and international organisations like the WTO with disdain. They push an oversimplified narrative where multilateral economic institutions are projected as pushing the agenda of the “corrupt elite” against the interests of the “real people” of India.

This is not the time for India to pursue such obscure economic approaches. India will make a terrible mistake if it considers international trade to be a zero-sum game where it can maximise its self-interests at the expense of its global competitors. Instead of turning its back on globalisation, India should play a leadership role in strengthening the international economic architecture, which populists in the West want to demolish, premised on a win-win relationship that produces mutual prosperity and global peace.

Prabhash Ranjan is a senior assistant professor at South Asian University’s faculty of legal studies. Views are personal.

Is India’s Scrutiny of Chinese FDI a Temporary Move or Part of a Sustained Future Strategy?

Whether this is just a one-off salvo in a more protectionist post-pandemic world or something more significant remains to be seen.

The economic outlook for an evolving COVID-19 world is that a global recession is now inevitable. And the availability of credit will decide how much of the world economy will survive.

In India, access to funds via foreign direct investment (FDI) has been tightened. In a cautious attempt to avert the rising possibility of “opportunistic takeovers” by nations from which large amounts of FDI flows into the country, the Indian government has mandated that all the investments from neighbouring countries, including China, would now require government approval.

This has sealed the “automatic route” for nations through which an increasing number of foreign firms and individuals had lately begun to invest. While not overtly stated, the policy change is likely in view of risks to the national interests in a scenario where viable Indian businesses would be sold to foreign Chinese interests.

In a direct defence against possible hostile takeovers in an environment of economic slowdown, the order issued by the Commerce Ministry’s Department for Promotion of Industry and Internal Trade (DPIIT) on April 18 stipulates that an entity of a country that shares a land border with India can invest only after receiving government approval.

It said the government has reviewed the FDI policy to curb “takeovers/acquisitions” of Indian companies due to the current COVID-19 pandemic.

Also read: One Eye on China, Modi Govt Tweaks FDI Policy to Curb ‘Opportunistic Takeover’ of Indian Companies

Prior to the issuance of this order, investments were automatically allowed, in all but 16 sectors pertaining to areas like telecom, defence, space, atomic energy and national security. Additionally, until now, government permission was mandatory only for investments coming from Bangladesh and Pakistan. The tweaked DPIIT rules state that, “an entity of a country, which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the government route.”

The announcement makes no reference to the discrimination between source countries, but the focus of the regulatory change is undoubtedly China.

It is also interesting that this is a rare display of unity on a specific issue by political parties. Congress Party leader Rahul Gandhi highlighted the matter on April 12. After yesterday’s changes to the FDI policy, he tweeted, “I thank the Government for taking note of my warning and amending the FDI norms to make it mandatory for Government approval in some specific cases,”

While technically the new protocol impacts all those countries which share land borders with India – Nepal, Myanmar, Bhutan, Afghanistan, Pakistan, and Bangladesh – its primary focus is to prevent China including its individuals and companies from hostile takeover control measures, given that they are investing in and acquiring companies all over the world.

Nepal, Afghanistan, Bhutan, and Sri Lanka have shown little interest in getting stakes in Indian businesses.

This will affect all existing and planned investments by China in Indian businesses. Automobile industry, electrical equipment and services sectors receive the highest inflows from China.

The new DPIIT rules also applies provisos on the transfer of ownership of an existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership falling within the restriction, “such subsequent change in beneficial ownership will also require government approval”.

This has been inserted to ensure that the restrictions are not circumvented by routing investments via Hong Kong, Singapore or other countries, although it remains unclear how effectively this will be policed.

Also read: SEBI May Scrutinise Investments from Cayman, Singapore for China Links

The alleged trigger for this FDI policy change was when HDFC, India’s biggest housing mortgage lender, announced that the Peoples Bank of China (PBoC) had raised its stake from 0.8% to 1.01%. Although HDFC’s management quickly noted that this was a routine transaction, it clearly raised red flags.

What is the Narendra Modi government worried about? Firstly, at a time of falling stock prices, a liquidity crunch and fall in earnings of Indian companies may make servicing of debts of their subsidiaries abroad impossible, thereby allowing foreign entities to take them over. Analysts warn that Chinese investments, unlike others, are in fact aimed at consolidating its geopolitical footprint.

India is not the only one cautious about Chinese takeovers. In recent weeks, many countries have either tightened their foreign direct investment policies or are exploring similar options.

On March 30, the Australian government asserted control over all new foreign investment in response to the COVID-19 pandemic. All FDI irrespective of the value of will now require approval from the Treasurer prior to being undertaken. Britain’s intelligence community believes the UK needs to reassess its relationship with China after the coronavirus crisis subsides and consider if tighter controls are needed over high-tech and other strategic industries.

While this move may be suited for Chinese FDI in large publicly-traded firms, how will it impact the start-up industry? In the past two years only, Chinese investors have poured about $6 billion into Indian startups. Dozens of Chinese firms and venture funds, including giants like Alibaba and Tencent have emerged as some of the biggest investors in Indian startups in recent years. Flipkart has an investment from Tencent (about 5%), a significant stake in Paytm is owned by Alibaba, social media operator ShareChat and food delivery firm Zomato are partly backed by Chinese venture capital and will be affected by this new rule.

Although the change in FDI is a measure to prevent Chinese hostile takeovers, its flip side is that it will make raising fresh capital in an environment of economic slowdown even more challenging. With preventive measures on FDI from neighbours which have been formulated with China in mind, businesses and startups will face severe disruptions.

Also read: Why India Should Support an SDR Issue by the International Monetary Fund

The prospects of these businesses post-COVID-19 will provide the foundations for economic recovery. But in the short run, they have financial commitments but insufficient cash. The change risks Indian access to the benefits of Chinese FDI — a valuable source of not just funds but also technology, know-how and links to markets. This will make smaller projects now even more expensive to implement. For India, Chinese investment was also a means to counter the widening trade deficit.

There are also a range of complex issues that may arise in determining how the changes apply to transactions that were entered into prior to the effective date but which had not otherwise required government approval under the old rules. This will hopefully be worked out sooner rather than later, so as to not cause even more trouble to India Inc at a time that is already extremely challenging.

Students wear masks of China’s President Xi Jinping as other waves national flags of India and China, ahead of the informal summit with India’s Prime Minister Narendra Modi, at a school in Chennai, India, October 10, 2019. Photo: Reuters/P. Ravikumar/File Photo

The broader, more strategic questions behind India’s decision are yet to be answered. Are these changes to FDI policy temporary in nature and will only apply for the duration of the COVID-19 pandemic? Will the government recalibrate FDI sourcing once the Indian economy consolidates itself? It will be interesting to see whether and how the government adjusts its practice to accommodate the uncertainties the revised FDI regime entails for Chinese investors in India.

With these China-focused FDI changes, the high-level mechanism set up after Modi-Xi Jinping to correct trade imbalances in Mamallapuram, will lose its momentum. Additionally, there is lack of clarity on the fate of Indian investments in China in sectors such as industrial manufacturing, consumer products, financial services, information technology, business process outsourcing, logistics, healthcare and telecommunications.

Big groups like Tatas, Infosys, Adanis, Jindal Power etc. have a presence in China which is the second-largest economy in the world. Annual revenues of Indian corporate investments in China account for anywhere between 3% to 20% of their global total. What implications would the new DPIIT notification have on bilateral investment relations, which is the main driver of trade?

In a world where FDI played a major role in the economic growth of developing countries, COVID 19 has indeed changed the rules of the economy making it once again necessary for India to become protectionist, albeit in a focused manner. Whether this is just a small blip or part of a new global strategy that will become entrenched is a question that will play out over the next year.

Vaishali Basu has worked as a consultant with the National Security Council Secretariat (NSCS) for several years. She is, at present, associated with the think tank Policy Perspectives Foundation.

India May Not Like It, But Sri Lanka Can’t Move Completely Away from China

Despite the final defeat of Rajapaksa—prime mover of closer ties with Beijing—Colombo is buried under billions of dollars of Chinese debt and has little option but to go along, albeit at a pace slower than earlier.

Photo of marine sand being pumped by a ship at the commencement of "Colombo Port City” at the Colombo, September 2014. Credit: Flickr/Mahinda Rajapaksa CC 2.0

Photo of marine sand being pumped by a ship at the commencement of “Colombo Port City” at Colombo, September 2014. Credit: Flickr/Mahinda Rajapaksa CC 2.0

The two cannons on the famous Galle Face promenade in Sri Lanka’s capital once overlooked the lapping waves of the Indian Ocean. Now they stare at sand and rubble, as a Chinese-funded project aimed at creating a new $1.4 billion city is gobbling up the sea and adding acres of new land to erect high-rise buildings.

Earlier this month, Sri Lankan voters gave a final thumbs down to the man who introduced his country to a raft of such expensive, ambitious projects ostensibly aimed at rebuilding the country after a long, bloody civil war against Tamil rebels.

Mahinda Rajapaksa, the once powerful president, lost his bid to become prime minister in a parliamentary election after refusing to learn hard lessons from his loss in January’s presidential bid. The once seemingly invincible, almost God-like Rajapaksa who delivered peace and hope to the war-battered nation was seen as divisive and close to China at the cost of Sri Lanka’s giant neighbour India.

His loss in the presidential election was seen in part as a victory for a geo-politically nervous India, a second chance for New Delhi to re-establish its influence in a backyard which was threatened by Rajapaksa’s increasing closeness to Beijing.

Chinese investments in the big-ticket infrastructure projects, which also included a sea port and an airport in Sri Lanka’s south and other developments, were only one concern for India. President Maithripala Sirisena, who defeated Rajapaksa in January and cobbled together a rainbow coalition under Prime Minister Ranil Wickremasinghe, was quick to put a halt to the projects and launch investigations against the former head of state and his family.

The other was Rajapaksa’s clear intention to play the two Asian giants against each other for his benefit. The view that his return as prime minister — he contested despite opposition from a section of his party — would encourage the Chinese to pop the champagne was also mostly correct.

While the cork may not have popped, let us not forget that Sri Lanka’s hands are now tied when it comes to its dealings with Beijing.

Buried under billions of dollars of Chinese debt, Colombo has little option but to go along, albeit at a pace slower than earlier.After all, Chinese money did prop up the war-battered economy, create jobs and help the government end the war against the Liberation Tigers of Tamil Eelam. The Chinese know that while the wicket might be sticky at this point, the pitch will eventually help the ball turn their way.

A commentary in the state-owned Global Times after Wickremasinghe’s return as premier for the fourth time last week was self-explanatory. “Although partisan politics may have a certain effect on bilateral ties, it’s inappropriate to exaggerate the influence. To consolidate high-level strategic cooperation with China has gained bipartisan backing in Sri Lanka’s parliament. No matter which party takes power, it will maintain a good relationship with China,” it said.

Indeed, Wickremasinghe himself is on record saying that he would deepen investment ties with China. And while Sirisena made India his first destination after becoming president, his second stop was Beijing.

Mahinda Rajapaksa briefing President Xi Jinping of China about the graphical illustrations of the “Colombo Port City” project at the official commissioning ceremony in September 2014. The port city project is the largest foreign-funded investment in Sri Lanka’s history. Credit: Flickr/Mahinda Rajapaksa CC 2.0

Rajapaksa’s proximity to China increased only because India dragged its feet over sensitive political issues due to coalition pressure on the previous government in New Delhi led by Manmohan Singh. Prime Minister Narendra Modi’s government doesn’t need to crumble under pressure from parties in Tamil Nadu as it has a comfortable majority in parliament.

But it still needs to remember that while Rajapksa re-calibrated Sri Lanka’s foreign policy—with a shift away from India in the past decade—Colombo’s ties with China didn’t start with him. No doubt they deepened dramatically during Rajapaksa’s time but the relationship between the two countries goes back a long way.

China is also capable of arm-twisting Sri Lanka if it falls too much out of line and Beijing feels its interests are not being balanced with that of India, or its investments are under threat. The Global Times commentary warns that in the Sirisena government’s efforts to recalibrate its foreign policy and seek a balanced approach in handling relations with big powers, China cannot be ignored.

“It’s only the outsider’s wishful thinking that partisan politics will stagnate or even turn back China-Sri Lanka relations. China will not depend on any single party to maintain the bilateral relationship,” it said, adding that Colombo was expected to gradually resume the suspended foreign-invested projects for the needs of economic development.

While India needs to look after its interests and ensure it remains engaged with Colombo to keep control over what it considers its sphere of influence, there is little it can do to wean Sri Lanka completely away from China.

The chances that the two cannons on Galle Face green will see more of sand and rubble instead of waves from the ocean are, therefore, pretty high.

Rahul Sharma, a former newspaper editor, is President, Rediffusion Communications and Vice President of Public Affairs Forum of India. He runs lookingbeyondborders.com, a foreign policy blog. Views are personal.

Credit for featured image of Galle Face cannon: Kesara Rathnayake, Flickr CC 2.0