Maldives Offers India Investment Safety Jacket Against China Wave

In a bid to allay New Delhi’s worries over Chinese presence in the Indian Ocean, Maldives has offered to India to invest exclusively in its ambitious plan of developing its northern most atoll into a strategically-located transhipment port on the Ocean’s busiest route.

Published: 01st March 2015 06:09 AM  |   Last Updated: 01st March 2015 11:31 AM   |  A+A-


NEW DELHI:In a bid to allay New Delhi’s worries over Chinese presence in the Indian Ocean, Maldives has offered to India to invest exclusively in its ambitious plan of developing its northern most atoll into a strategically-located transhipment port on the Ocean’s busiest route.

The Sunday Standard has learnt that this offer to India was made at a below-the-radar meeting of Mohamed Hussain Shareef, the minister in Maldives President Yameen’s office, with his Indian interlocutor last week.

Interestingly, the ambitious Ihavandhippolhu Integrated Development (iHavan) project, which would a 45-minutes-flight away from India’s southern coast, was reported to be one of the links through which China’s Maritime Silk route was supposed to have passed.

india1.jpgThe visit of the minister, a close aide of President Yameen, was chiefly to attend a meeting of the World Health Organisation, but he used the opportunity to meet senior functionaries in the Indian government on February 20.

“It was conveyed that Maldives had not planned to give any country exclusivity over the iHavan project, but, Maldives was willing to make that exception for India,” said a source. The offer was elevated to the ministerial level recently, but it was previously mentioned in meetings between the officials in last few months.

Sources said that the offer had been made as Maldives was aware that India was sensitive to presence of China, especially in the northern part of the archipelago which is closest to Indian- territory.

The proposal also comes in the backdrop of Indian perception that China had made deep inroads into Maldives. The opposition Maldivian Democratic Party has repeatedly accused the government of being too pro-China, positioning itself as a supporter of a dominant Indian role in the region.

The February 20 meeting took place when both sides were preparing for the visit of PM Narendra Modi to Maldives as part of his planned four-nation Indian Ocean island tour in mid-March. Five days prior to that visit, Maldives foreign minister Dunya Maumoon also landed and met external affairs minister to discuss the agenda of the visit. However, uncertainty hangs over the visit following the political upheaval over the arrest of opposition leader and former president Mohamed Nasheed on February 22.

The iHavan project proposes to exploit its location between the seven and eight degree channel on the east-west shipping route that travels from Asia-Pacific to West Asia and beyond. Over $18 trillion worth of goods travel through this channel.

Maldives unveiled the iHavan along with four other mega projects, at its first overseas investment roadshow in Singapore last April, hoping to attract big capital which had become scarce following the cancellation of GMR group’s contract for developing Male international airport in 2011.

An official described iHavan project as Maldives’s Hambantota, referring to Sri Lanka’s second biggest port located on the east-west shipping route. With Chinese money and expertise backing the expansion of the deep sea port, Hambantota is considered to be a strategic headache for India.

Sri Lankan president Mahinda Rajapaksa had claimed several times that Hambantota port project was  offered to India first, but failing to get a response, he went to China.

That China has its eye on Maldives’ strategically located project is apparent. In August 2014, a report of Chinese state-run news agency Xinhua, on the visit of President Yameen to China mentioned that the maritime silk route project to which Maldives signed up last year is drawn through the iHavan project.

It caused alarm bells to ring in Indian strategic circles. Former foreign secretary Shyam Saran had recently said pointed out that a strong naval presence in Indian Ocean was considered “an indispensable component” of China’s emergence as a great power, as per most Chinese strategic writings.

He said China’s Indian Ocean strategy as per a 16-character recommendation is, “select locations meticulously, make deployments discreetly, give priority to cooperative activities and penetrate gradually”. The “roll-out” of the guideline was apparent, referring to recent Chinese activities of port-building, ship visits and Maritime Silk route project in India’s neighbourhood, he had argued.

Sources say Indian officials have not yet given a response to the Maldivian offer, pointing that the viability of the project is still not completely clear. The feasibility-report for iHavan is still under preparation.

india.jpgWhy is India worried?

■ Ihavanddhippolhu atoll is 45-minute flight from the Indian mainland

■ Chinese firms making economic inroads is often followed by beefed-up naval presence in Indian Ocean, a pattern observed in Sri Lanka

Why is China interested?

■ It wants the project to be a link for its Maritime Silk route initiative

■ Its location straddles some of the busiest shipping corridors

■ To increase strategic presence in the Indian Ocean

The Ihavan Project

To be located on Ihavanddhippolhu atoll, Maldives’ northern-most island, its proposals include trans-shipment port, airport, warehouse, export processing zones, cruise hub, dockyard, crude storage and international financial centre.

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