South Asia is witnessing the power struggle between the Asian giants, India and China. The race towards occupying the throne of Asia has been in place since the onset of a race towards achieving astonishing annual growth rates, something that both the nations have been witnessing since the early 1990’s. Whereas Beijing wants to secure its trade interests and dominance in the commercial routes in the region, India’s resistance arises out of increasing dominance of the China in its own backyard. This race has now entered another level with the growing role of the neighboring tiny nations in the region, who are both beneficiaries as well as victims of this stiff competition. One area where both the countries try to dominate is the energy sector; both India and China have significant investments in the energy sectors of the South Asian nations and aspire to emerge as the “controller” for the energy flow in the most strategic and sensitive space in Asia. The most recent development in this regard is the trans-border supply of energy from the Damodar Valley Corporation (DVC) to Bangladesh. The public utility from the Indian side has won the contract to provide the energy deficient neighbor with steady energy flows, crucial for the industries and the MSMEs (Micro, Small & Medium Enterprises) operating across the nation. The deal will also mean that the public sector utilities like NTPC and DVC will now have to expand their businesses across the boarders and will ensure a steady flow of income as the contract is signed with a predetermined supply and price per unit. This is indeed another feather on the cap of the present regime, as the ‘power’ diplomacy will yield more influence for New Delhi in the region.
Traditionally, India has been playing the role of the regional hegemony in the Indian Ocean, particularly among the South Asian Association for Regional Cooperation (SAARC). However, with the rise of the Beijing’s commercial and trade influence in the region there are growing concerns within the Indian diplomatic community. The One Belt, One Road initiative of China and the trade incentives that they have been offering through the programme is gaining momentum than ever before. Nearly 50 countries have agreed or signed the agreement so far. And with the nature and magnitude of the investments that China is making in those countries, India cannot afford to wait. Though India can’t carry out a programme of a similar magnitude as its economy and financial resources are less than half of China’s, it can still retain the diplomatic and strategic relationships with its neighbours through its limited resources. One alternative is energy supplies, considering the geographic and natural resources that India hold’s. From Indonesia to Mauritius, India today has sizable investments in developing the power grid. Similarly, India has also vowed to bring the developing nations of the region in the ambitious $1,000 billion solar power alliance. India has also interests in developing its own energy capabilities through the network of such nations. For instance, India is in the process of developing the petroleum transit and bunkering facilities in Mauritius. The idea behind the energy diplomacy is that India wants to develop an inter-dependent network of uninterrupted power supplies, rather than relationships that are contentious or one-way in nature. This will also give a momentum to the Act East policy of India and will further amalgamate Indian influence in the region.
However, there are several challenges ahead. One would be the delays that Indian initiatives often face in execution. Compared to the Indian investments, China is far ahead with proposal submission and execution. Similarly, Indian companies are not competitive enough to win bids and often the Chinese firms win the bids for investments. It must be also kept in mind that while India tries to win the hearts of the neighbouring countries, it should not come at the cost of the domestic economy. India as an emerging economy will need more and more energy supplies at cheaper costs to boost its economy and to assist the development of the production sector. Given the surging power prices year after year, India cannot afford shortages in its own power grid. As more and more river water disputes emerge between various states across the country, using the national resources to appease other countries must be done with great caution. However, if the nation can manage the balance between diplomatic appeasement and domestic interests, well the country can move further closer to its dream of being a superpower.
— Contributed by Jiss Palelil
Picture Credits: cyberwar.news