China could well turn out to be the biggest beneficiary of GMR Infrastructures forced exit from the Male airport project following a dispute with the Maldives government and Tuesdays Singapore court ruling upholding the governments right to take over the airport.
External affairs ministry officials told FE on condition of anonymity that China was keen to get a foothold in the Male airport asset as a base in the Maldives would put the dragon state in control of the oil routes in the region and give it greater dominance over sea lanes.
More than 80% of international trade to and from Asia passes through Maldivian territory. And while India and the Maldives have been enjoying strong relations, the nation is of strategic interest to China.
Chinas foremost interest in the Maldives is to protect its increasingly important supplies of energy that need to transit the Indian Ocean, said former Major General Dipankar Banerjee, a mentor of the Institute of Peace and Conflict Studies.
China is making inroads in the Maldives by building infrastructure projects and supporting the tourism industry. For Maldivian traders too, China is becoming an import business destination. Indias increasing involvement and influence among smaller island states mirrors Chinas expansion in the region. Given the economic links between India and China, however, a direct confrontation is unlikely.
Due to its location in the Indian Ocean alongside major shipping lanes, the Maldives is of strategic interest for both China and India. China has recently opened an embassy in Male, which symbolises its increasing interest in the Maldives.
The directions are very clear. It seems we dont follow assertive foreign policy. Bit by bit China is entering Maldives and India is being pushed out. In fact, the Chinese embassy is coming up at a location close to where the Indian embassy is located, said Anand Kumar, an associate fellow at the Institute for Defence Studies and Analyses.
According to Kumar, With Indian company like GMR being pushed out, it is an indication that the relations between the two countries are deteriorating.
In September 2012, India increased its security relations with the Maldives when defence minister AK Antony announced that India would train Maldivian air force and navy personnel and extend by two years the deployment in the Maldives of an Indian helicopter squadron. Also announced was the stationing of defence staff in the Maldivian embassy in New Delhi, assistance for Male with the surveillance of its exclusive economic zone and an economic support package worth a further $500 million.
China has been consistently expanding its own interests in island nations on Indias periphery the Maldives, Sri Lanka, Seychelles and Mauritius all countries in where India has traditionally been the main strategic provider. Beijing has provided those countries with several millions of dollars in aid and infrastructure projects. The perceived threat to Indias influence in the region and, potentially, its security, has led to increased aid to these countries from New Delhi. That is especially so in the Maldives, which sits on an important sea line of communication between the West and East Asia.
However, experts now opine that this military relationship could be put on hold. With elections a little more than a year away, the future of the Maldives and the region is still uncertain. Given the confused nature in which the Maldivian transfer of power took place, India would benefit from an election held as soon as possible, say experts.