As Asia’s two largest economies, both India and China have over the years enjoyed a robust trade and investment relationship with their South Asian neighbours. This sentiment holds true not only for countries like Bangladesh, Sri Lanka, or Nepal, but also for African Indian Ocean Island Nations like Mauritius, Seychelles, and Madagascar. These states have developed important economic links with both India and China without being overly dependent on either. They have been able to adeptly demonstrate their capacity to exert agency in their interactions with India and China, which are both engaged in a geostrategic competition for influence in the wider Indian Ocean Region (IOR).
India considers these island nations to be a part of its extended maritime neighbourhood and has traditionally enjoyed close, multi-faceted ties. Indian interests in these countries have been guided by an amalgamation of security, cultural, and economic overtures. As a fellow developing country, India has been conscious 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 profile as a major power, India has demonstrated its capability and willingness to assist its neighbours to deal with common maritime and developmental challenges. Much of these overtures have been in the form of developmental assistance, investing in maritime and air connectivity, and initiatives like the Initiative for the Resilient Island States (IRIS).
On the other hand, China’s engagement with these three countries has been guided by economic considerations for the most part. Its heavy reliance on overseas resources and energy supplies, especially oil and natural gas, has played a crucial role in shaping Chinese strategy and engagement in the IOR. All these African Island Nations have looked to expand trade and investment links with China as a way of developing their economies.
Approaches to development aid
Development aid and assistance have been a crucial part of both India and China’s outreach to African Island Nations. The Indian approach has mostly been in the form of capacity building and training under the Indian Technical and Economic Cooperation (ITEC) programme, Lines of Credit (LOC) or concessional loans, grant assistance, trade, and investments.
Prime Minister Narendra Modi in Seychelles. Photo: MEA
India has sought to distinguish itself from China as a development partner by insisting that India’s approach towards development is human-centric and its development partnerships are marked by respect, diversity, future-oriented, and sustainable development. The selection of all Indian projects and their method of implementation are arrived at through a consultative process, keeping in mind local requirements and sentiments. India’s development aid is completely non-conditional and is not influenced by either political or commercial considerations.
China, on the other hand, sees itself as a rule and norm-setter for global development practices of the future. China has released three white papers defining its approach to foreign assistance: in 2011, 2014, and recently in January 2021. China’s latest white paper emphasises an activist approach to multilateral rule-setting and a normative pivot from the transaction-led activities that characterised the first five years (2013-2017) of the Belt and Road Initiative (BRI).
Chinese development assistance insists on the principles of mutual learning, sustainability, lasting impact, and breaking new ground, although various industrial economies have levelled criticism against the BRI for lacking transparency, its ad-hoc nature, tendency to push developing economies into ‘debt-traps’, and allegations of corruption and unfair labour practices.
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India is Mauritius’ largest development partner. In May 2016, the Indian government provided a special economic package of US$ 353 million to Mauritius for the execution of five projects – the Metro Express Project ($275 million), the Supreme Court building ($30 million), a new ENT Hospital ($14 million), the Social Housing Project ($20 million), and supply of digital tablets to primary school children ($14 million). Some other Indian-assisted projects in Mauritius include the Upadhyay Training Centre, the Subramania Bharati Eye Centre, the Jawaharlal Nehru Hospital, the Rajiv Gandhi Science Centre, the Swami Vivekananda International Conference Centre, and others.
In Seychelles as well, India has funded the construction of various national priority projects of Seychelles, including a new $63.66 million government house, a $13.92 million police headquarters and a $13.38 million attorney general’s office. India also extended a cash grant of $3.5 million in June 2017 for the construction of a magistrate court building. In Madagascar, India funded the construction of a new Centre for Geo-informatics Applications in Rural Development (CGARD) in 2018, along with many concessional LOCs for setting up fertiliser plants, development of irrigation, farm mechanisation and food processing projects.
Like India, China has also invested in the construction of flagship infrastructure projects in Mauritius, Seychelles, and Madagascar. In Mauritius, China has constructed the Jinfei Economic, Trade & Cooperation Zone (Jinfei Zone), which is essentially a smart city, in addition to a new airport terminal at Mauritius International airport worth $260 million.
In Seychelles, China has constructed a new media broadcasting facility and the La Gouge Dam project constructed by Sinohydro Group Ltd to improve water security in case of drought. In addition, many projects were built by the financing of Chinese grants, including the National Swimming Pool, the National Assembly building, Palais De Justice, the Anse Royal Hospital, the Glacis Primary School, Crèche and many other projects. In Madagascar as well, China has assisted in the construction of many economic and social projects, including the rehabilitation of RN2 (Moramanga-Andranonampango), a primary school for China-Africa Friendship, a Sports and Cultural Palace, Anosiala Hospital, and an international conference centre at Ivato.
Maritime and air connectivity
Both India and China desire to expand cross-border connectivity with these African Island Nations. This approach has manifested itself primarily in the form of maritime-port connectivity, and air connectivity.
In 2015, India signed two important deals to construct joint naval facilities in Assumption Island, and for airfield and port development in Agalega Island worth $87 million, in Seychelles and Mauritius respectively. While the Agalega Island project with Mauritius is well-underway, the deal with Seychelles for Assumption Island got embroiled in Seychelles’ domestic politics, where a combination of opposition and environmentalists raised concerns over the island’s relative proximity to Aldabra Atoll, a UNESCO world heritage site. This eventually led the media to report that the deal is ‘dead’ and will not move forward. The main concern from Seychelles’ side remains that there were no consultations with locals over the Assumption Island deal with India 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 with Seychelles and Mauritius. While there are currently no direct flights to Antananarivo, Madagascar has recently proposed a direct Air Madagascar direct 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.
Way forward
India and China share a long history of robust relations with African Indian Ocean Island nations. While the security aspect of this relationship tends to get 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 view these island nations as a destination to set up a manufacturing base for the export of their goods into continental Africa. Countries like Seychelles and Mauritius, through a strategy of both balancing and bandwagoning, have been able to exert their agency and their ability to influence events, especially ones that concern their own security and future.
Going forward, India and China will continue to position themselves as these island nations’ principal development partners. This will be done through a mix of economic overtures through investments, lines of credit, and security assistance.
Both will continue to finance the construction of high-impact community development projects, in line with the national priorities of these island nations. The manner in which India and China will attempt to increase their ‘soft power’ and distinguish their developmental model from each other will inform the nature of their engagement in these Indian Ocean Island states.
Abhishek Mishra is an Associate Fellow in Strategic Studies (Africa) Programme at Observer Research Foundation, New Delhi.