By P. K. Balachandran Courtesy Eurasia Review

Santosh Jha has to pursue India’s economic goals in the face of a stiff challenge from China 

Santosh Jha, who is tipped to be India’s envoy in Sri Lanka in place of the incumbent, Gopal Baglay, is expected to   vigorously pursue India’s economic goals in Sri Lanka, given his strong background in economic diplomacy. 

Jha was a Counsellor at the Indian High Commission in Colombo in charge of economic affairs during the reconstruction of war-devastated Northern Sri Lanka after the cessation of hostilities in 2009. 

He was also involved in the negotiations to enter into a Comprehensive Economic Partnership Agreement (CEPA) with Sri Lanka. And as Ambassador to the European Union in Brussels, he was part of the negotiations for an India-EU Bilateral Trade and Investment Agreement.

India is already deeply involved in Sri Lanka’s economic recovery from a crippling foreign exchange crisis. It has given a financial package of US$ 4.5 billion to meet urgent needs. 

On his part, Jha will be implementing India-Lanka agreements on a wide range of high-value infrastructure and energy projects agreed upon during Lankan President Ranil Wickremesinghe’s State Visit to India in July. 

Onerous Task

Jha will have a tall order to meet in Sri Lanka as the Vision Statement” issued by Indian Prime Minister Narendra Modi and Sri Lankan President Ranil Wickremesinghe in New Delhi on July 21, is truly ambitious.  

Here are some of the key infrastructure projects envisaged: 

(1) Development of ports and logistics infrastructure at Colombo, Trincomalee and Kankesanthurai; 

(2) Exploration of land connectivity” between India, and the ports of Colombo and Trincomalee with a bridge across the Palk Strait; 

(3) Cooperation in developing renewable energy enabling Sri Lanka to achieve its target of generating 70% of power requirements from renewable energy sources by 2030; 

(4) Establishing a high-capacity power grid interconnection between India and Sri Lanka to enable bidirectional electricity trade between Sri Lanka and other regional countries, including the BBIN countries comprising Bangladesh, Bhutan, India, Nepal, which has the potential to not only bring down the costs of electricity in Sri Lanka but also help create a valuable and dependable source of foreign exchange for it; 

(5) Expediting implementation of an understanding reached on the Sampur Solar power project and LNG infrastructure, 

(6) Cooperation in green hydrogen and green ammonia through the use of innovative technologies with an aim to increase renewable energy mix in power generation of Sri Lanka; 

(7) Developing the Trincomalee Tank Farms and other developmental projects in the Trincomalee area; 

(8) Constructing a multi-product petroleum pipeline from Southern India to Sri Lanka with an aim to ensure affordable and reliable supply of energy resources to Sri Lanka; 

(9) Undertaking joint exploration and production of hydrocarbons in Sri Lanka’s offshore basins with an aim to develop Sri Lanka’s upstream petroleum sector; 

(10) Facilitating investments from India in the divestment of Sri Lankan State-owned Enterprises and in manufacturing/economic zones in various sectors in Sri Lanka;

(11) Holding discussions on an Economic and Technology Cooperation Agreement (ECTA) with an aim to comprehensively enhance bilateral trade and investments in new and priority areas; 

(12) Implementing the decision to make the Indian Rupee a currency for trade settlements between the two countries; 

(13) Operationalising an UPI-based digital payments system for further enhancing trade and transactions between businesses and common people; 

(14 Leveraging India’s Digital Public Infrastructure in accordance with Sri Lanka’s requirements and priorities towards effective and efficient delivery of citizen-centric services to the people of Sri Lanka.

Geopolitical Issues 

Complicating the scenario, these projects have to be implemented in a challenging geopolitical context, namely, in the face of stiff competition from China. 

Beijing is also wooing Sri Lanka vigorously for more projects for itself. Though in contrast to India’s generosity, China is still dragging its feet on debt restructuring or extending emergency financial aid to help Sri Lanka overcome the forex crisis, it has a significant reservoir of support in Sri Lanka, which cannot be wished away.     

India is also perturbed by Sri Lanka’s unclear approach to India’s sensitivities about Chinese surveillance ships and ballistic missile tracking ships docking in Sri Lankan ports. India has raised the red flag every time there is such a visit. 

A Chinese research vessel Yuan Wong 5 has now sought permission to dock in Hambantota for logistic purposes. But Sri Lanka has not yet given the green signal. 

Rohan Masakorala, a maritime shipping expert and CEO of the Shippers’ Academy Colombo, told Nikkei Asia that according to available information, the ship has long-range scanning capabilities that can be used to map defence installations and help the Chinese military’s strategic planning. Media reports have said it will be conducting space tracking, satellite control and research tracking operations in the region.

This is not considered just a battleship by the Indians, but rather in their view this is a spy ship,” Masakorala is quoted as saying.

However, according to Sunday Morning, Sri Lanka is working on a Standard Operating Procedure (SOP) for foreign military ships wanting to call at Si Lankan ports. According to the proposed SOP  relevant Sri Lankan officials will board the vessels to ensure that nothing is done to jeopardise India’s security.  

In the context of China’s geopolitical challenge to India, Indian Defence Minister Rajnath Singh is to visit Trincomalee shortly, says Daily Mirror.