Prime Minister Narendra Modi has done well to caution developing countries on the perils of falling prey to debt trap diplomacy. Speaking recently on the occasion of the inauguration of Mauritius’ new Supreme Court building, which was built with Indian economic aid, Modi drew attention to how countries are being driven into debt and dependence in the name of development. He didn’t mention China by name, but it is obvious that it is the ‘debt diplomacy’ that China is engaging in with many countries that Modi was alluding to. Under the Belt and Road Initiative, China has offered to build port and other infrastructure in several countries and extended massive loans to this end. But these are on terms that are unfavourable to the recipients. While noting the importance of human-centric approach as the main philosophy of India’s development cooperation, Prime Minister Modi praised the role of people-oriented infrastructure projects which would help in further cementing the ties between the two countries. Many are now unable to pay back even the interest, let alone the capital, and are stuck in a debt trap. This has been the experience of Sri Lanka, for instance, which then had to hand over the strategically located Hambantota port and some 15,000 acres of adjoining land to the Chinese on a 99-year lease. Other countries are sinking into similar Chinese debt traps. Their sovereignty is being eroded. It is in this context that the Indian model of development aid merits attention.
As Modi pointed out, India’s aid to developing countries has been in the nature of a partnership and based on the principles of respect and cooperation. This is quite in contrast with the Chinese model, which is unequal, exploitative and neo-colonial. In addition to predatory terms for loans, China has insisted on projects being executed by Chinese labour, denying jobs to locals. India has done well to pursue an aid model that is cooperative and participatory. Its building of some 50,000 houses for Tamils displaced by the civil war in Sri Lanka, for instance, involved deep consultations with project beneficiaries. In Africa, it has made locals important stakeholders in the diamond trade by providing them with diamond-cutting skills. This approach has generated public goodwill. However, India has failed to draw strategic benefit from its development aid as it has failed to contain rising Chinese influence in these countries. It is to China that countries continue to turn for infrastructure projects despite the huge costs they entail.
India was the first to send a medical consignment to Mauritius to deal with the COVID pandemic and this included Hydrocloroquine (HCQ) tablet and other essential medicines. Also a medical team was sent, and a special consignment of Ayurvedic medicines too. Unlike China, which has been extremely efficient in executing projects and meeting deadlines, India’s projects are notorious for delays and suffer from cost overruns. It is by adopting an aid approach that is not only cooperative but also efficient that India can counter Chinese influence effectively.