The Indian Prime Minister paid the return visit a month later, in mid-March. This and Sirisena’s decision to ‘review’ the whole gamut of $5 billion Chinese investments in Sri Lanka, in particular the $1.5 billion Colombo Port City project, has raised Beijing’s hackles. These investment proposals were cleared by the Rajapaksa Government.

A researcher with the official think-tank Shanghai Institute for International Studies, Liu Zongyi, has written that Modi’s Jaffna visit was an ‘interference in the internal affairs of Sri Lanka.” He did not stop there but issued a veiled threat to Colombo: “If the Sri Lankan Government ignores China’s goodwill in a bid to cater to certain Powers, it will hardly gain support from the international community.” He has reminded Colombo that during its war of attrition against the LTTE it was China which always stood by Sri Lanka firmly.

China has reasons to be unhappy. Its well thought out policy to bring Sri Lanka under its sphere of influence is being neutralized by Sirisena and Sri Lanka’s foreign policy is being put on an even keel. Sirisena made his position quite clear during his visit to New Delhi last month: “In considering the past, we make a clear commitment towards following a foreign policy of the middle path, in friendship with all nations.”

Two of the major projects being built in Sri Lanka with Chinese help are causing worries to India. The first is the Colombo Port City (CPC) Project. It is a 233-hectare artificial island which is being built by a Chinese firm. Once completed, the Chinese will control 108 hectares in the CPC – 20 hectares on freehold basis and 88 hectares on a 99-year lease. It may be recalled that last year, the Rajapakse Government allowed Chinese submarines to be docked at the Colombo port twice, raising India’s fear and apprehension.

The second and more worrying for India is the Hambantota port project in the southern tip of Sri Lanka. The first phase of the project is estimated to cost $361 million, 85 per cent of which will be provided by the Exim Bank of China at 6.3 per cent interest. The second phase will cost $808 million. The entire amount will come as a loan provided by the Chinese. China is also funding the $292 million Colombo Port Highway and the $350 million South Container Terminal at Colombo.

The commercial and strategic importance of Hambantota cannot be overemphasized. The port project was started in 2007. It lies close to one of the busiest shipping lanes of the world. Some two hundred vessels come to it every day. It can handle ships of up to 100,000 DWT (dead weight tonnage, which means the maximum load of man and cargo a ship can carry). The strategic importance lies in that its facilities can be put to dual-use – commercial as well as military. It can be easily used for stationing warships and submarines, as a fuel storage facility and as an air strip for basing fighter aircraft.

It will enable China to have a far larger footprint in the Indian Ocean Region (IOR) to India’s obvious disadvantage. Indian defence establishsment thinks it is of a piece with China’s ‘String of Pearls’ policy of encircling India. It is in pursuance of this policy that China has built the Sittwe port in Myanmar, the Gwadar port in Pakistan and offered to develop the Chittagong and Sonadia ports in Bangladesh. What is more, in future Hambantota can well become a Chinese ‘listening post’ monitoring movement of Indian naval ships including submarines, and opening a gateway for free access to Chinese warships and submarines. If this happens, it will tilt the naval power balance against India in the Indian Ocean Region.

As a counterpoise to Hambantota, India is developing the Trincomalee port in eastern Sri Lanka, about 270 kms from Hambantota. The Indian Oil Corporation has built oil storage facilities here. Keeping in view its importance, India opened a consulate at Trincomalee in November, 2010. The IOC’s storage facility here is stated to be the largest one between Singapore and the Middle East.

But India’s major developmental efforts in Sri Lanka are now concentrated at the war-devastated Jaffna in the north of the island, which was once the stronghold of the LTTE. India is doing its best to rebuild the area. India has offered a credit line of $800 million at concessional rates for the Northern Railway Project. In the days to come the rivalry between India and China for maritime and strategic dominance will sharpen and each country will try to woo Sri Lanka. (IPA Service)