Is India’s ‘necklace of diamonds’ complete?

When India’s Prime Minister Narendra Modi went to dine with his Japanese counterpart Shinzo Abe a few days ago, Indian Twitter was agog at their matching striped slippers by the fireplace.

Less chattered upon was the progress in an ambitious India-Japan economic project called the Asia-Africa Growth Corridor. This is a Modi-Abe dream to counter China’s Belt and Road Initiative by taking the fight to the enemy territory, so to speak, to an area of the world which is the third largest destination for Chinese investment. In September China’s President Xi Jinping announced $60 billion in aid and investment for Africa. As India looks and acts East, Japan, as the 2013 Japan External Trade Organisation (JETRO) report pointed out, must ‘look West’—and when it does, it sees security in India’s growth, its old connections to open African markets (including for white goods), and the bulk of its army. This month, as an extension of the so-called ‘bromance’ between Modi and Abe, India and Japan began their first joint military exercise called Dharma Guardian in the northeast India.

All of this makes Japan a pivot in what is being called India’s ‘necklace of diamonds’—a strategic and economic countering of China’s ‘string of pearls’ effort of encircling India with hubs of its influence.

But what does this necklace of diamonds actually look like and how complete is it?

Starting 2018, the Indian armed forces have three new strategic bases—at Changi in Singapore, Duqm in Oman and Sabang in Indonesia. The most noteworthy of these, from a countering-Chinese-influence perspective, is Sabang near the Malacca Strait. So important is this 500-nautical mile sea route that at least 30% of the world’s sea trade passes through it, including, by some estimates, 80% of Chinese oil imports. In 2003, China’s President Hu Jintao described this as China’s “Malacca Dilemma”. China is working on alternative routes to transfer energy to solve this dilemma—through Myanmar, Pakistan, and the Isthmus of Kra in Thailand, but the route remains significant enough for Indian presence there to matter.

Access to Singapore Changi Naval Base (a base also for the US Navy’s Pacific Fleet) near the South China Sea for refuelling of ships of the India navy and other logistical support, is another crucial pivot for India in southeast Asian waters. Meanwhile, in the neighbourhood, India has improved defence ties with Vietnam with a five-day naval exercise in May. Reports that India might sell surface-to-air missiles to Vietnam even drew a response from the Chinese state media that Beijing will not sit idle to such developments in South China Sea, which China considers as its natural zone of influence.

Duqm has an interesting geo-strategic position too, close as it is to two Chinese hubs, Djibouti in the Horn of Africa and Gwadar (Pakistan). Oman is India’s oldest defence ally in West Asia and it helps further pry open those crucial African markets for India and Japan.

The deal with the Seychelles on Assumption Islands where India is building a naval base nearly failed with Chinese influence fuelling domestic political opposition to an agreement between the two countries in 2015. But it came through after the Seychelles was given a $100 million credit line for defence purchases and the first state visit for President Danny Faure to India. India is estimated to be pumping $550 million into developing this base.

India’s around $8 billion proposed investment in Iran’s Chabahar Port is also significant not only because it is an important counterpoint to Chinese investment in Gwadar but also because India has managed to extract US waiver of sanctions otherwise placed on Iran for this project.

The Indian necklace does not span the oceans alone. One bit of the strategic depth is nestled in the frozen heights of Mongolia. With a $1 billion loan, India is helping Mongolia build its first oil refinery which, when complete in 2022, will meet the nation’s fuel needs, end Mongolia’s dependence on Russian fuel, and boost GDP by 10%. Prime Minister Narendra Modi’s visit to Mongolia in 2015, the first by an Indian Prime Minister, opened new possibilities, which were strengthened after tensions over the Dalai Lama’s visit to Mongolia in 2016. This is without doubt a new arena to watch out for in India’s efforts to contain China.

What remains to be seen of course is how far this strategy works and how it fares when the political actors, for instance Modi and Abe, change. For now, there is some semblance of a valid Indian challenge to China’s string of pearls.