India and its Geo-Strategically Significant Island Neighbours


Interdependence is an expression used increasingly to define global interactions. Interdependence is perceived as a catalyst, expanding the level of intensity in international relations. One of the primary objectives of many regional powers has always been cultivating and maintaining good neighbourly relations. Economic cooperation and interdependence was the major mechanism used for this policy.

The Indian Ocean Region (IOR) is fast becoming significant for maritime trade and energy supply routes. The status of India as a rising superpower necessitates it to broaden its national interests outside its borders. India will redefine future international relations in the IOR. India sees it rising leadership role in the region to be of manifold importance for its geo-political and trade interests and to also promote its Neighbourhood First Policy and Security and Growth for All (SAGAR) doctrine. In the recent past, India’s regional interests with its neighbouring island nations of Mauritius, Seychelles, Sri Lanka, Maldives and Réunion has been growing. These geopolitically well-located islands are of utmost importance to major nations to have stability in the Indo-pacific region. The increasingly multifold interdependencies between India and the five Indian Ocean islands are established on common strategic interests. The prime focus of India’s relations with these islands is on trade diplomacy and maritime security.

From a regional perspective, as a small nation, Sri Lanka needs India to further its strategic interests.  In this regard, Sri Lanka’ geo-strategic location in the Indian Ocean has become massively relevant in India’s Foreign policy implementation. For years, the five Indian Ocean islands have benefited from welfare gains of their neighbourhood engagement. While being a close ally of the US, India is pursuing stronger ties with its island neighbours. In order to strengthen its neighbourly ties, India should take into close consideration domestic matters when drafting its foreign policy agenda with these five island nations. One of the key features when reshaping ties and narrowing the gap between India and its island neighbours is the policy of non-interference.

‘Neighbourhood First’ through aid and trade diplomacy

Mahatma Gandhi referred to the island nation as India’s daughter State during his visit to Sri Lanka in 1927. The paramount importance that India has for Sri Lanka since antecedence is emphasised in this remark. Sri Lanka will be a vital island partner for India to easily develop its relationship with, in order to maintain regional balance of power. India and Sri Lanka had adopted foreign policy profiles that were eastward-aligned within the wider non-alignment framework. Sri Lanka’s bilateral trade with its large neighbour expanded generously since the year 2000 when the Indo-Sri Lanka Free Trade Agreement (ISFTA) was implemented.

Under the new ‘India First’ doctrine, Sri Lanka aims to further expand its engagement with India and protect India’s strategic security interests.  During times of need, India has historically stood by the island nation and continues to abide by this policy by being a reliable partner and easing the economic burden of Sri Lanka. This year, India has been the major source of foreign assistance to Sri Lanka as the country grapples with a considerable economic crisis.

The two countries have established an official-level mechanism for conducting economic dialogues subsequent to signing the ‘four pillar economic cooperation agreement’. So far, India has been the most forthcoming and largest provider of assistance to Sri Lanka. Notably, India’s massive bilateral support to Sri Lanka to deal with the economic crisis can be divided into two broad categories: assistance to meet the immediate requirements; and assistance in the country’s efforts to revive the sectors that were affected by the global pandemic and the foreign reserves crisis. As Sri Lanka’s reliable ally,  India has delivered around US$ 3.5 billion in aid by means of currency swaps, loan deferments and credit lines for essential imports as well as support with foreign reserves. India’s support to Sri Lanka is in line with its ‘neighbourhood first’ policy and vision for ‘Security and Growth for All’ (SAGAR). 

Maldives turning over a new leaf In diplomacy 

The Maldives which is well within the boundaries of the Indian strategic orbit is an important buffer zone that divides the Eastern and Western Indian Ocean. The Maldives has strategic checkpoints on either ends of its borders in the Indian Ocean where oil passes through on a daily basis. Within the Maldivian boundaries are the straits of Hormuz, the Gulf of Aden and the Malacca Strait.  

Diplomatic relations between India and the Maldives have entered into a dynamic new phase with strengthened ties and bilateral cooperation.  India’s most important foreign policy tool has been financial aid. In 2018, India extended a financial assistance package worth  United States Dollar (US$) 1.4 billion in the form of budgetary support, currency swap and concessional lines of credit to fulfil the socio-economic development programmes of the Maldives.

Strategic relations between India, Mauritius and Seychelles

India and Mauritius established formal diplomatic relations in 1948. Since 2005, India has been among the largest trading partner and one of the largest exporters of goods and services to Mauritius. The first trade agreement signed by India with any African country since 2011 is the India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA). Mauritius will provide preferential access to India for 310 products under this agreement. During financial year 2020-21, Mauritius was the third largest source of Foreign direct investment (FDI )into India with equity inflows amounting to US$  5.6  billion. In the past few years, India’s humanitarian assistance and disaster relief (HA/DR) operations have been built upon its outreach to the IOR, specifically the Western Indian Ocean. India has been pushing for deeper security ties with nations to its South and Southwest in the Indian Ocean.  India has regularly reiterated that Seychelles is fundamental to its SAGAR vision. The past two years has seen further strengthening of India-Seychelles defence and security cooperation with a particular focus on maritime safety and surveillance of Seychelles’ extensive Exclusive Economic Zone.

The Indian Engagement with Indian Ocean islands

The shifting and vulnerable domestic political agendas of Indian Ocean island nations make the formulation of foreign policy slow in development and implementation. An independent foreign policy that is not dominated by external forces is important for South Asian nations in order to make independent decisions that protect and promote national and regional interests. The five Indian Ocean island nations of Mauritius, Seychelles, Sri Lanka, Maldives and Réunion promote their national interests in coevality with mainland India. These geopolitically well-located island nations are of paramount importance to major nations for stability in the Indo-pacific region.

About the Author:

Dr. Srimal Fernando received his PhD in the area of International Affairs. He was the recipient of the prestigious O.P. Jindal Doctoral Fellowship and SAU Scholarship under the South Asian Association for Regional Cooperation (SAARC) umbrella. As a Lecturer, he focuses on comparative politics of Small Island Developing States (SIDS). Dr. Fernando is an academic specialist in International Relations and an adviser on New Regional Diplomacy. He has received accolades such as the 2018/2019 ‘Best Journalist of the Year’ in South Africa (GCA) Media Award for 2016 and the Indian Council of World Affairs (ICWA) accolade. He is the author of ‘Politics, Economics and Connectivity: In Search of South Asian Union.’

By Dr. Srimal Fernando