Indian extends first-ever rupee denominated Line of Credit
In the first of its kind initiative, India has extended a new Line of Credit for Rs 487.60 crores to the Government of Mauritius for financing of a water pipeline replacement project.
The Indian Ocean has recently acquired unusual prominence in global affairs. It used to be on the fringes of the action, an occasional thoroughfare for passing cargo vessels, not a place where the Powers contended for dominance. Its maritime resources were largely untouched before the trawling fleets arrived to decimate the fish, and extraction of metallic nodules from the ocean bed was nothing more than a visionary thought. Yet even at that early stage, when its maritime capacity was limited, India was aware of the strategic importance of the surrounding ocean and tried to develop a naval presence there commensurate with its interests and its future needs. This has been a constant preoccupation of Indian strategists; no less necessary than establishing an Indian presence was the need to keep the Indian Ocean free of the rivalries that could spill over into the littoral and provoke unwanted competition in the region. This was one of the important drivers of the nonaligned initiative at the UN to maintain the Indian Ocean as a Zone of Peace (IOZOP), which was especially important during the Cold War when the rival groups were trying to establish military bases in the seas around India.
The initiatives of that time have changed and taken new shape, yet India’s strategic imperatives remain what they have always been, prominent among them being the abiding concern with the Indian Ocean and its littoral. It is in this context that we need to see the relationship with Mauritius, which is located right in the middle of the Indian Ocean and has a population overwhelmingly consisting of persons of Indian origin. India has played its part in the slow, almost reluctant release of Mauritius from the grasp of the former European masters, who were reluctant to give up this prized strategic asset. As was only to be expected, India has lavished a great deal of attention on Mauritius and has made a particular effort to affirm and develop the underlying cultural links. To recall, the first elected Prime Minister Sir Seewoosagar Ramgoolam was Chief Guest at the World Hindi Conference in Nagpur in 1975 that was attended by Mrs. Indira Gandhi, who later paid a pioneering state visit to the island. By these means, close contacts between the two countries have been developed and promoted at the very top, in consideration of the importance of the relationship.
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To some extent, Mauritius has been seen as a launchpad for a stronger Indian engagement with Africa. This is focused on but not limited to economic matters, though the Indian loan of $ 500 million announced during the visit is a sizeable sum and should have useful results. Nothing on this scale would have been possible in the earlier days but with much larger sums on offer for Africa’s development from other sources, like China, the Indian loan does not look like something dramatic. Nor should one ignore the great progress made by Mauritius since its emergence, for it is now comfortably within the ranks of the middleincome countries, with per capita income that greatly exceeds that of India. As a result, India’s economic interaction with Mauritius is not to be measured only, or even primarily, in terms of what it can provide by way of development assistance. More significant is the manner in which Mauritius has been able to carve out for itself some unique economic arrangements that build on the very special consideration the two countries show to each other. Even at a time when India’s economy was still greatly constricted and governed by restrictive rules, Mauritius was able to obtain special dispensation for Indian investments and financial exchanges that led to flourishing and varied commerce between the two countries. The more orthodox of India’s financial managers were not pleased to see such a breach in the country’s forbidding financial defences but it was rightly seen as a special arrangement to give substance to a special relationship, and has now been subsumed in the more general liberalization that currently prevails.
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The economic partnership between the two countries remains meaningful despite the great disparity in size and the new priorities of the present day, and this was to be seen during Mr. Jugnauth’s visit. No less striking is the political spinoff as signified in the shared decision to strengthen security cooperation. As activity in and around the Indian Ocean builds up, as it has been doing for the last few years, and as fresh players enter the scene, there is all the more need to strengthen the mutual understanding that has been built up between the two countries. Questions of security have acquired salience, and in the Indian Ocean the incidence of piracy has been growing. India has become more active in the fight against the pirates and has had some success in dealing with them. There is obvious benefit to the region as a whole in closer cooperation to counter this threat. India has steadily helped Mauritius to build up its maritime capacity with the aim of strengthening regional security. It was Mr. Jugnauth who spoke of some of the problems that need to be addressed, including trafficking in drugs and excessive fishing, apart from the issue of piracy. India is an active partner in the Mauritian security programme, having provided a certain number of patrolling and surveillance craft that have been effectively deployed around Mauritius. PM Jugnauth’s New Delhi visit took this process further by extending the life of a Coast Guard ship that India had provided some years ago, so as to augment naval capacity.
An issue that has now come up and could cause some complications in the Indian Ocean area is the One Belt One Road (OBOR) initiative of China. This is an ambitious programme with multiple prongs and it has received a wary response from India. Mauritius and other Indian Ocean island countries have little to contribute to the landbased portion of OBOR, which is centred on the China-Pakistan Economic Corridor (CPEC) but can be drawn into the maritime portion sometimes described as the Maritime Silk Road. What seems to be happening is that China is actively promoting this maritime concept which can take a shape that could add to India’s concerns in the Indian Ocean.
How this initiative evolves is a larger and broader matter that will be under regional scrutiny. Meanwhile we can legitimately celebrate the success of the visit of Mr. Jugnauth. The close ties between his country and India are a source of confidence to both. Now that the formerly somnolent waters of the Indian Ocean have been disturbed, the countries of the littoral have to be ready individually and collectively to meet fresh challenges.
(The writer is India's former Foreign Secretary)
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