Following the cancellation of GMR’s airport contract in Male, there has been much hand-wringing in New Delhi. This is India’s backyard, it has been said, and the Male airport area itself was secured by Indian troops as recently as 1988, when the government of the Maldives was threatened by Tamil mercenaries from Sri Lanka.

While all of that is true, it is also history. It offers no indicator to the future and India cannot despatch gunboats simply because an Indian company has been unfairly, and perhaps illegally, deprived of its assets. That is not how the world works.
Why has the problem occurred? There is lazy thinking that this is all the result of growing Chinese influence in the Maldives. While it is true a rising Islamisation and the spectre of China are threats to India, it cannot be denied that these forces will fill strategic gaps only if India vacates them. In the case of the GMR contract, there is no evidence the Chinese asked for the contract to be broken. However, it is likely the Chinese will benefit from the contract being broken. The two are different.
There are suggestions that the Indian company’s “environmental management” and its rather rapid replacing of local employees at the airport with Indians was not quite judicious. Was this alone the deal breaker? We don’t know. What we do know is that when Mohamed Nasheed, the democratically elected President of the Maldives, was overthrown by a coup earlier this year, India rushed to recognise the successor regime and did so as soon as it received guarantees about the airport contract being adhered to. In a sense, it linked an important foreign-policy decision to just one deal and refused to take a big-picture approach.
Mr Nasheed’s camp was aghast at this and felt betrayed. Representing a political idea different from the traditional establishment in Male, Mr Nasheed had fought and argued for an Indian company to be given the airport contract. His rivals — those who promised to honour the contract after the mutiny/coup against him — had on the other hand seen no strategic advantage (or balance) from pushing an Indian presence in such a
manner.
At the time this happened, the airport project was seen as a critical indicator of India’s growing economic prowess. This country’s infrastructure is so poor that it can hardly offer itself as a role model to its neighbours. China, in contrast, is projecting itself as the infrastructure provider of choice in South and Southeast Asia.
Without the capacities and efficiencies to compete — and with bureaucracy and time delays the norm — lumbering Indian public-sector companies have just not been able to make a match of it. As President Mahinda Rajapakse pointed out at an interaction recently, the Sri Lankan government had initially offered the right to develop a port in Hambantota to India. New Delhi dithered, being unsure if it could come good on any promise to build a modern port within a promised deadline.
Tired of waiting,
Mr Rajapakse happened to mention the project to Chinese leaders on a visit to Beijing, even though it was not part of the formal agenda for the meeting. They acted swiftly. Today, Indian security thinkers worry the Chinese-built Hambantota port is part of a “String of Pearls” meant to encircle India. This may or may not be true, but is largely a problem of India’s creation.
Only in recent years has the maturing of private Indian infrastructure companies given New Delhi a foot in the door in terms of infrastructure projects in the neighbourhood. GMR’s Male airport was one example. GVK is building new airports for Indonesia in Bali and Java. Some countries are turning to India to give themselves alternatives to China and expand strategic choices. Other countries are turning to China to give themselves alternatives to India and expand strategic choices. India can gain on the first count in Indonesia and the Asean region; equally it can lose on the second count in the Maldives and the Saarc region.
There are two points to note here. First, disagreements between an external government and an Indian company are not necessarily a national cause for India. While India has every right to back and support the expansion of Indian capital and trade and business globally, it has not signed a mutual-defence treaty with its big corporations. The merits of the case need to be understood and if GMR has recourse to legal and arbitration mechanisms, in addition to diplomatic pressure, these should be examined. GMR may be right, GMR may be not so right. We don’t know and cannot decide simply because it carries an Indian passport.
Second, the reason why the Maldives, among others, can exercise greater options is that India’s peripheral oceans are far more “internationalised” today than say 20 years ago. The old notion that the Indian Ocean is or can one day become the Ocean of India, as Indian naval capacities are augmented, is theoretically possible but increasingly improbable. The defence of India’s strategic space in the Indian Ocean cannot be conducted by raising unrealistic walls. It lies in more distant waters.
For years, India has sought to restrict Chinese influence in the Indian Ocean by arguing it is an “extra-regional” power. This is a strange and almost bizarre idea that expects China — or any power for that matter — to simply draw a line in the water, recognise artificial regional boundaries defined by geopolitical map-makers of an earlier age and sit tight. It can equally easily be contended that India is an “extra-regional” power in the Malacca Strait and much of the Asean region.
As such, securing India’s economic interests in the Maldives will be better served by building economic interests in, for instance, Malaysia. Concomitantly, inevitable Chinese forays into the Indian Ocean will need to be countered with Indian exploration of the South China Sea, which sooner or later has got to be acknowledged as within India’s legitimate domain. The South China Sea is a part of the Western Pacific but abuts the Indian Ocean. In many respects, the key to that airport in Male lies in its waters.