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China subtext to twin trips

Ansari and Khurshid

New Delhi, Jan. 14: One unstated theme lies behind the ongoing trips to Vietnam and Bhutan by Vice-President Hamid Ansari and foreign minister Salman Khurshid: China’s increasing influence in the region.

Ansari arrived in Hanoi today and Khurshid in Thimphu, one to deepen New Delhi’s “strategic partnership” with a difficult neighbour of Beijing and the other to coax a long-time friend against favouring China as a hydropower investor at India’s expense.

Vietnam, which has territorial disputes with China over the South China Sea, treats India as a counterweight to Beijing’s increasingly aggressive posturing in the region. Over the past decade, it has pursued closer ties with India, particularly in defence cooperation and oil and gas exploration.

India, too, treats Vietnam as “a pillar” of its Look East Policy. The two countries inked a “strategic partnership” agreement in 2007 and are looking at increasing their bilateral trade to $7 billion.

“Defence cooperation is a very strong part of India-Vietnam relations. Our naval ships regularly visit Vietnam and there are constant reciprocal visits by senior military officials of the two countries. We also have a defence secretary-level strategic dialogue with Vietnam,” an external affairs ministry official said.

South Block sources said Ansari would visit Hanoi and Ho Chi Minh City during his four-day trip.

China provides an equally important subtext to Khurshid’s two-day Bhutan trip, his first to the neighbouring country since becoming foreign minister.

New Delhi is worried at Chinese public sector companies’ growing efforts to enter Bhutan’s hydropower sector, where India is now the only foreign country to have a stake. Thimphu, however, plans to open up the sector to global investments, hoping to earn foreign exchange by exporting power to energy-scarce Bangladesh and China.

Bhutan now generates 2,000MW and exports all its surplus power of 1,500MW to India. A bilateral agreement signed in 2006 requires Thimphu to eventually supply 10,000MW to India. Bhutan says it will fulfil this commitment before opening its hydropower sector to other countries, including China.

The Bhutanese leadership, however, has been complaining about India’s tardy hydropower investments. It says the Indian companies should complete the projects faster if Bhutan has to fulfil the 2006 agreement.

Officials in New Delhi concede that India’s public sector undertakings have been slow in building power projects in Bhutan. This is where China, with its record of more efficient delivery of infrastructure projects, is trying to step in — and is being viewed by Thimphu as an attractive option.

Khurshid is likely to ask the Bhutanese to keep faith in India.

India and Bhutan have a very close relationship. The bilateral trade, which was Rs 61.6 billion in 2011, accounted for 72 per cent of Bhutan’s imports and 85 per cent of its exports. India has also given a Rs 10,000-crore grant in aid towards Bhutan’s tenth five year plan.

Khurshid will meet King Jigme Khesar Namgyel Wangchuk and his father Jigme Singye Wangchuk. He will officially invite the king to be the chief guest at this year’s Republic Day Parade.