# guardian.co.uk, Wednesday 9 June 2010 16.45 BST
India and Sri Lanka signed a series of aid, economic and diplomatic deals today, the latest move in an increasingly intense struggle between New Delhi and Beijing for influence over the island nation.
The signing took place on the first day of a visit by the Sri Lankan president, Mahinda Rajapaksa, to Delhi, his first since winning his presidential election in January and parliamentary poll in April. The deals range from loans for major infrastructure projects to agreements to share electricity and boost cultural exchanges.
Dubbed "the new Great Game", the battle between China and India for primacy in the Indian Ocean is set to be one of the major themes of the coming decades, according to analysts. Sri Lanka's geographic position is its main draw.
"China wants to be the pre-eminent power in Asia and whether Asia ends up multipolar or unipolar will be determined by what happens in the Indian Ocean. Currently there is a power vacuum there and the Chinese want to fill it," said Brahma Chellaney, professor of strategic studies at Delhi's Centre for Policy Research.
Among the deals signed today was a £300m loan for the construction of railways to be carried out by companies owned by India's Ministry of Railways. Most Indian assistance is focused on the northern parts of Sri Lanka, dominated by the country's ethnic Tamil minority and devastated by years of war.
Delhi also announced the opening of consulates in the Tamil-dominated city of Jaffna and, significantly, in the southern port city of Hambantota, where Chinese contractors are building a vast deep water port in a project largely financed by the Chinese government's lending arm, the Export-Import bank. Indian strategists believe the port, expected to be completed by 2020, is a key link in a chain of such projects from Burma to Pakistan, the so-called "string of pearls", which seek to extend China's maritime influence.
"China is building up naval forces and is eager to secure safe bases and anchorage in the Indian ocean. But India's position and coastline give a tremendous operational advantage," Chellaney said.
Though Sri Lankan ministers downplay the extent of Chinese influence, few observers doubt that the Indians have lost ground to their rivals in recent years.
Beijing has already embarked on a major road-building programme in areas north of the Sri Lankan commercial capital, Colombo, and is helping with the construction of a new power station. A £140m loan to build a second international airport in the south of the island, seen as crucial to boost the tourist business, has also been agreed. In March, the Sri Lankan government said China was supplying more than half of all the construction and development loans it was receiving.
Rajapaksa's visit sparked protests by politicians and groups representing India's Tamil ethnic community. Tens of millions of ethnic Tamils live in the southern Indian state of Tamil Nadu, many of whom blame Rajapaksa for what human rights groups have claimed were high levels of civilian casualties in the final days of the civil war against the Tamil Tiger separatists last year.
Manmohan Singh, the Indian prime minister, did raise the question of a political settlement granting Sri Lanka's Tamils more autonomy, Indian officials said, though Rajapaksa has previously made clear he is unlikely to favour such a measure.
"India is caught in a strategic quandary regarding Sri Lanka," said Iskander Rehman at Delhi's Institute for Defence Studies and Analysis. "Its sizeable Tamil population means that it feels a natural sense of solidarity with the Tamil civilian population but it knows that if it criticises the government too harshly it may risk losing even more strategic space to the Chinese."
Singh was also described as "reassured" after speaking to the Sri Lankan premier about Colombo's efforts to rapidly resettle the tens of thousands of Tamils displaced by fighting who continue to live in refugee camps.
The new Great Game in Asia
Bangladesh: A recent thaw in relations and a trade deal has brought Dhaka closer to Delhi. But Beijing recently proposed a port and roads linking the coast to China via Burma, costing $9bn.
Burma: China is building roads and an oil and gas pipeline from within China to the port they are constructing on the Bay of Bengal.
Pakistan: China is involved in a range of multi-billion dollar infrastructure projects, from widening the Karakoram Highway over the Himalayas to building a huge port at Gwadar on the southern coast. Chinese engineers also run many crucial irrigation works.
Nepal: A recent Chinese offer to help Nepal upgrade roads and border posts along their mutual frontier has rattled Delhi. So have increasing economic ties with Beijing.
Afghanistan: India has been funding hospitals, roads and even building the new parliament building, all in a bid to buy influence and, Delhi hopes, a degree of popularity, to the tune of $1.4bn. Chinese businesses have flooded Afghanistan with cheap goods. A Chinese company has bought the rights to exploit the enormous copper deposits at Aynak, in Logar province, for $3bn.
India's deals with Sri Lanka heighten stakes in 'Great Game' with Beijing | World news | The Guardian