Twenty-sixth May of this year (2024), marks 10 years since Indian Prime Minister Narendra Modi’s swearing in as the 14th Premier of India and the commencement of his ‘neighbourhood first’ policy. The policy aims to reprioritise South Asia in India’s outreach, development assistance, security calculus, and connectivity. Sri Lanka, an immediate neighbour of India, has been a significant beneficiary of this policy. The last decade has seen the strengthening of bilateral relations between both the countries at various levels. Nonetheless, external and internal irritants continue to hinder this deepening relationship.
A significant achievement of Modi’s Sri Lanka policy has been his ability to inject pragmatism into the relationship and deter excessive domestic pressures. While calls for reconciliation, the 13th Amendment to the Constitution, and solving the fishermen’s arrests continue, the Modi Government has focused on improving overall relations. This is for two reasons: one, the increasing Chinese presence and influence in Sri Lanka has compelled India to rethink its strategy, and two, a majority in the Parliament has offered the Government the flexibility to reach out to the Sri Lankan leadership, cater to the country’s needs, and increase cooperation. To testify to this commitment, in 2015, Modi became the first Indian Prime Minister to visit Sri Lanka in 28 years, and his stopover to Jaffna marked the first ever visit by an Indian Premier to the war affected region. This has set a precedent for several high level bilateral visits between both the countries.
The Modi Government is also involved in water supply projects, the construction of hospitals, and financial and technical assistance for the ambulance service system that functions throughout the country.
Development cooperation has seen a significant uptick in the last decade, with India’s overall development cooperation portfolio accounting for United States Dollars ($) 5 billion. In addition to inheriting previous commitments, the Modi Government has pushed for new people-centric and infrastructure-oriented projects. The war-affected north of the country has seen India develop rail links and infrastructure, a stadium, and an international airport. The Modi Government is also involved in water supply projects, the construction of hospitals, and financial and technical assistance for the ambulance service system that functions throughout the country. The latter has seen remarkable success by attending to 8.2 million calls and 1.9 million medical emergencies. In the last decade, India has built nearly 60,000 houses for the Tamil community in the north, east, and central Sri Lanka.
India has also continued to demonstrate itself as the first responder. Besides offering relief for floods and droughts, Modi was the first world leader to visit the country following the Easter blasts of 2019 and pledged $ 50 million to counter terror related challenges. During Covid-19, India opened a travel bubble facility, deployed an Army team to assist the country, and offered medical supplies and vaccines. Between 2015 and 2020, New Delhi delivered multiple currency swaps and a $ 400 million line of credit. The onset of the economic crisis saw India offer $ 4.5 billion worth of assistance to Sri Lanka via credit lines, grants, emergency supplies, currency swaps, investments, and modernisation.
There has been a significant push for connectivity in energy, ports, trade, and maritime security, especially following the economic crisis. This will help Sri Lanka’s economy to recover and be resilient, and on the other hand, it offers an opportunity for India to increase its economic ties while also pushing back against China. On energy connectivity, India is exploring renewable energy projects in Sampur, Mannar, and Pooneryn. There are discussions to connect Sri Lanka to India through energy grids and bi-directional oil pipelines and jointly develop oil tank farms in Trincomalee. On ports, the Adani group is investing in the West Container Terminal (WCT) of the Colombo Port, and an Indian firm will be managing the Mattala Airport in a joint venture. On maritime security, India is offering a floating dock facility, a Dornier aircraft, and a maritime rescue coordination centre. There are also ongoing negotiations to connect India and Sri Lanka through a land bridge and implement the Economic and Technology Cooperation Agreement (ETCA).
A primary challenge in the last decade is China’s influence in Sri Lanka and the latter’s inability to comply with New Delhi’s redlines. Over the years, India has grown accustomed to the fact that China is seen as a valuable partner in the neighbourhood. But, there are certain developments that India looks upon as redlines, like docking Chinese submarines and spy ships in Sri Lanka, leasing the Hambantota Port to China for 99 years, Chinese investment and stakes in the Colombo Port, and investments in close proximity, especially in the Northern Province of Sri Lanka.
Domestic politics, anti-Indian sentiments amongst certain sections, and suspicion towards India have contributed to the slow implementation or unilateral cancellation of certain projects and initiatives.
While Sri Lanka has expressed sensitivity to some of these concerns and acted on the same, it is unable to alienate or limit Chinese pressure due to the latter’s investments, deep pockets, and leveraging of debt restructuring negotiations. In fact, in the recent visit of the Sri Lankan Prime Minister to China, Beijing reportedly asked Sri Lanka to reconsider its decision on a one-year moratorium over research vessels and condemned the country for cancelling projects on behalf of other countries, referring to its energy projects in the Northern Province. This shows that Chinese influence and pressure will continue to impact India-Sri Lanka relations as India-China competition intensifies.
Another major challenge is that both the countries have been unable to solve their bilateral differences and irritants due to domestic politics. While India remains focused on the 13th Amendment, major parties in Sri Lanka have continued to look for a solution beyond the Amendment. Both countries have also failed to solve the fishermen issue despite forming a Joint Working Group. Finally, domestic politics, anti-Indian sentiments amongst certain sections, and suspicion towards India have contributed to the slow implementation or unilateral cancellation of certain projects and initiatives. Even several recently implemented projects, like the Trincomalee project, the ETCA, the land bridge, the power grid, the pipelines, and the WCT, have undergone several back and forths in the past.
Over the last decade, India and Sri Lanka have seen an increase in bilateral relations. Both countries have seen improvement in development cooperation, connectivity, and cooperation in disaster response. That said, major irritants remain unresolved and, in some cases, have only exacerbated in the last decade. The recent incident of the Indian Government criticising the opposition for giving up on Katchatheevu and a viral video where a Sri Lankan man expressed concerns over Indians taking control of Sri Lankan airports indicate that domestic politics and elections cannot be separated from bilateral ties. Therefore, there is a need for both India and Sri Lanka to discuss their irritants and chart a way ahead. Perhaps, this month’s (June) Elections could nudge both the countries in that direction.
This commentary originally appeared in The Morning.
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Aditya Gowdara Shivamurthy is an Associate Fellow with ORFs Strategic Studies Programme. He focuses on broader strategic and security related-developments throughout the South Asian region ...
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