India worried over China's renewed bid to lay its debt trap in South Asia in the wake of COVID-19 pandemic

Not only China’s state-owned business entities are on the prowl to take over weakened companies in India, but the communist country is also taking advantage of the COVID-19 crisis to expand its strategic footprint in South Asia.

New Delhi is worried over China’s renewed bid to spread its tentacles in the neighbourhood of India, on the pretext of providing assistance to South Asian nations in the wake of the pandemic and the consequent stress on the economies in the region caused by the curbs and the lockdowns enforced to contain it.

China has already donated COVID-19 test kits, coveralls, masks and other protective gears to Nepal, Sri Lanka, Bangladesh, Afghanistan and Maldives, in addition to its “iron-brother” Pakistan. New Delhi also moved early to counter the charm offensive launched by China in the region, with Prime Minister Narendra Modi joining other leaders of the South Asian Association for Regional Cooperation (SAARC) in a virtual summit on March 15.

India donated medical supplies to almost all its neighbours, sent medical teams to some and even arranged webinars for healthcare professionals of the South Asian nations for training in management of the pandemic.

New Delhi, however, is worried about the possibility of China taking the advantage of the pandemic, offering loans and putting the South Asian nations in debt traps – thus posing a security threat for India.

“We can only go to a certain extent in reaching out to our neighbours in South Asia, maybe helping them with little bit of what they need in this hour of crisis,” a source in New Delhi said, adding: “But India surely cannot do what China can do with its deep pockets”.

China already provided a preliminary $ 500 million concessional loan to Sri Lanka to help it cushion the economic impact of the COVID-19 pandemic.

A number of diplomatic sources in New Delhi indicated that Beijing has offered similar loans to Bangladesh, Nepal and Maldives too.

Sri Lanka had to lease out the Hambantota Port to China for 99 years after its construction by a company based in the communist country resulted in a huge debt burden on the tiny Indian Ocean nation. Maldives was also caught up in an estimated $ 3 billion debt-trap as the erstwhile government of the island nation in the past few years awarded the state-owned companies of China contracts to build several infrastructure projects, allegedly on unsustainable loan terms.

The Chinese Government has often been accused of putting other nations in debt traps on the pretext of supporting development projects as part of its ambitious cross-continental Belt and Road Initiative, which New Delhi has been strongly opposing.

“If the countries in our neighbourhood get caught up in such debt-traps, it will ultimately pose a security threat to us,” said the source in New Delhi.