Indian Prime Minister Narendra Modi looks set to counter China's influence in the Pacific where Beijing has funded a number of key infrastructure projects.
While emphasising shared values and a shared future for India and the Pacific Island nations, Modi announced the allocation a $12 million grant ($1 million to each country) towards the implementation of a high impact renewable energy project in an area of their choice.
"In addition, a concessional Line of Credit of $150 million which can be availed by the India-Pacific Islands Developing States (PSIDS) for undertaking solar, renewable energy and climate-related projects based on each country’s requirement," the prime minister announced on Wednesday after holding meeting with Pacific Island leaders in New York on the sidelines of the UN General Assembly.
The meeting was attended by Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Kingdom of Tonga, Tuvalu and Vanuatu.
Of these countries, five have diplomatic relations with Taiwan. Only last week, The Solomon Islands recognised Beijing's "One China Policy" and Beijing announced it would soon re-establish diplomatic relations with Kiribati.
A US State Department report claimed that an examination of trade, investment, development assistance, and tourism data shows China has become one of the major players in the region, well ahead of the US in most areas.
The report also mentioned that Beijing’s heightened engagement in the region in recent years is largely driven by its interests in promoting its diplomatic and strategic priorities; reducing Taiwan’s international space; and gaining access to raw materials and natural resources.
US naval and air force bases are located in Guam, and Micronesia is an area where the US military regularly operates and trains.
The Pacific Island nations have the same voting power as the world’s largest economies in the United Nations and the decision to boost funding for the region may be seen as an attempt by India to curry favour in the region.