India, Sri Lanka, Bangladesh
WSJ reports on India’s deals with its neighbours:
India Monday signed an agreement to build a large power project in Sri Lanka, a move that reflects New Delhi’s eagerness to counter China’s growing influence in the region.
India, a traditional political and economic ally of its southern neighbor, is worried about increasing Chinese investment in the island nation and this is prompting India expand its economic cooperation with Sri Lanka, according to foreign-policy experts.
Under the deal, state-run Indian power producer NTPC Ltd. and Sri Lanka’s Ceylon Electricity Board would jointly build the 500-megawatt coal-powered plant with an investment of at least $500 million.
The move to revive the project signals “awakening within the India government” of the inroads China has made in its neighborhood, Bharat Karnad of New Delhi think tank Centre for Policy Research said.
China has been working on strengthening its economic and political ties with Sri Lanka ever since it supported Colombo in its operations against Tamil guerrilla forces. China is present in Sri Lanka’s infrastructure space and has built port and power projects and is looking to tap more opportunities.
Bilateral trade between China and Sri Lanka totaled 2.6 billion in 2012, according to data on the website of Sri Lanka’s Department of Commerce. Of this, Sri Lanka’s exports to China accounted for $108 million.
India’s trade with Sir Lanka totaled $4.6 billion. This included $625 million of exports from Sri Lanka.
According to media reports, Sri Lanka and China are set to sign a free-trade agreement, which could further boost businesses between the countries.
Monday’s agreement with Sir Lanka follows another deal under which India began supplying electricity to Bangladesh starting this weekend.