Renewed proximity with India can help Sri Lanka reduce its dependence on foreign reserves, while giving Delhi the leverage to push for benefits.
By visiting China in 2008, Pushpa Kamal Dahal, also called Prachanda, became the first Prime Minister to break the tradition of Nepalese premiers choosing India as their maiden destination of visit. Fast forward to June 2023, Mr Prachanda not only chose India to be his first destination but also expressed contentment with his four-day visit, dubbing it an “astounding success”. The recent visit indicates that India and Nepal are moving beyond their fraught phase and taking this “hit” relationship to “Himalayan Heights.” During these four days, both countries prioritised convergences over divergences – they signed five projects and six MoUs. Areas such as hydropower electricity, connectivity, and people-to-people relations remained the centre of this fruitful engagement.
While India-China competition and Chinese assertiveness have triggered some changes in Bhutan’s foreign policy, recent developments suggest that continuity still looms large in Bhutan-India relations
The crises in Sri Lanka and Pakistan are raising questions about the relevance and the costs of their reliance on the alternative financial system provided by China’s Belt and Road Initiative On March 6, China became the last major bilateral creditor to provide financing and restructuring assurances to Sri Lanka. Following this, the International Monetary Fund (IMF) has agreed to make a final decision on Colombo’s $2.9 billion bailout package. Sri Lanka’s consistent back-and-forth negotiations with the IMF and China indicate a broader development in South Asia. In 2022, two other South Asian nations and participants of the Belt and Road Initiative (BRI) — Pakistan and Bangladesh — had sought financial assistance from the IMF. These developments in the subcontinent indicate that developing countries are furthering their economic interests and stability by approaching the IMF and the West, even as they try not to antagonise China.
With tensions between an aggressive China and an emerging India intensifying, there will be significant changes and challenges in the Indian Ocean and South Asian regions. As 2022 comes to an end, the world is embracing a ‘new normal’ where new fault lines are being reconfigured in the Indo-Pacific.
The latest Indian Ocean Forum is another way to challenge Indian influence and presence in the Indian Ocean. This is not China’s first attempt to corner India in its backyard. With the onset of Covid-19, Beijing has shaped multiple initiatives with other South Asian nations, excluding India, and has attempted to institutionalize them. These initiatives have focussed on post-pandemic recovery, enhancing connectivity, emergency supplies reserve, poverty alleviation, and e-commerce cooperation.