International Relations
India-Sri Lanka Relations
- 09 Apr 2025
- 12 min read
For Prelims: South Asian Association for Regional Cooperation, Vesak Day, Foreign Direct Investment, SLINEX, MITRA SHAKTI, Belt and Road Initiative
For Mains: India-Sri Lanka relations and challenges, India’s Neighbourhood First policy
Why in News?
Prime Minister Narendra Modi’s visit to Sri Lanka resulted in the signing of 7 memorandums of understanding (MoUs) with the Sri Lankan President. This visit underscores India's commitment to its 'Neighbourhood First Policy' and aligns with the 'MAHASAGAR' vision aimed at fostering regional security and growth
What are the Key Highlights of the India-Sri Lanka Bilateral Talks?
- Sri Lanka Mitra Vibhushana: Prime Minister Narendra Modi was awarded the ‘Sri Lanka Mitra Vibhushana’, the country’s highest civilian honour.
- The award includes a citation and a silver medal adorned with Navarathna (nine Sri Lankan gems). The medal features a Pun Kalasa (symbol of prosperity), Sun and Moon (eternity), and a Dharma Chakra, reflecting the shared Buddhist heritage.
- Defence Cooperation: India and Sri Lanka signed a landmark 5-year Defence MoU, an umbrella agreement aimed at structuring joint exercises, maritime surveillance, and defence industry collaboration.
- Sri Lankan reaffirmed Sri Lanka’s commitment to ensuring that its territory will not be used against India’s interests.
- Energy and Infrastructure: The two sides agreed on the India-Sri Lanka grid interconnection for electricity trade.
- Additionally, a tripartite MoU involving the United Arab Emirates was signed to develop Trincomalee (Sri Lanka) as an energy hub, including the construction of a multi-product energy pipeline.
- Development and Finance: India also converted over USD 100 million in loans into grants and reduced interest rates on other loans to support Sri Lanka’s debt restructuring.
- Prime Minister Narendra Modi launched key projects in Sri Lanka, including the refurbished Maho-Omanthai railway line (supported by Indian assistance of USD 91.27 million), the Sampur Solar Power Project, and a solar rooftop initiative for 5,000 religious sites in Sri Lanka (with India’s credit assistance of USD 17 million), generating 25 MW of green energy.
- Cultural and Religious Diplomacy: The PM announced that relics of Lord Buddha found in Gujarat’s Aravali would be sent to Sri Lanka for exposition during the Vesak Day celebrations in May 2025.
How have Relations Between India and Sri Lanka Been?
- Trade and Commerce: India is one of Sri Lanka’s top trade partners, and vice versa within South Asian Association for Regional Cooperation (SAARC).
- The 1998 Free Trade Agreement (FTA) boosted bilateral trade to USD 5.5 billion in 2023–24, with India’s exports at USD 4.1 billion and Sri Lanka’s at USD 1.4 billion.
- India is a key Foreign Direct Investment (FDI) contributor to Sri Lanka, with cumulative investments of USD 2.25 billion till 2023.
- Tourism and Connectivity: India is the leading source of tourists to Sri Lanka (around 4.16 lakh in 2024 (~20% of 2.05 million total).
- Sri Lanka’s adoption of India’s UPI and use of the rupee for trade settlement boost fintech connectivity.
- Development Cooperation: India has extended over USD 7 billion in credit and USD 780 million in grants to Sri Lanka.
- During Sri Lanka’s 2022 crisis, India provided nearly USD 4 billion in aid, and India also supported Sri Lanka during the Covid-19 pandemic with vaccines and medical supplies.
- Defence & Security Cooperation: Key bilateral exercises include SLINEX (Navy) and MITRA SHAKTI (Army), held alternately in both countries.
- India acts as a 'first responder' for Sri Lanka in the field of Humanitarian Assistance and Disaster Relief, as seen in the MV XPress Pearl incident (2021), a container ship fire disaster causing significant environmental damage.
- Cultural and Civilizational Ties: Deep-rooted Buddhist and Hindu ties, including the sacred Jaya Sri Maha Bodhi tree, highlight strong cultural bonds. India supports temple restoration and religious tourism under its cultural diplomacy efforts.
- Indian Community: Sri Lanka hosts around 10,000 People of Indian Origin (PIOs) and about 1.6 million Indian-Origin Tamils (IOTs).
Note: The Jaya Sri Maha Bodhi tree in Sri Lanka is believed to have grown from a branch of the Bodhi Tree (Bihar) under which Buddha attained enlightenment. It was brought by Sanghamitta, daughter of Emperor Ashoka.
Why are India and Sri Lanka Important to Each Other?
- India's Importance to Sri Lanka: India has shown strong commitment to Sri Lanka’s economic recovery, providing an unprecedented USD 4 billion in aid and being the first creditor to assure support for the IMF bailout programme.
- India is Sri Lanka’s largest trade partner, leading FDI source, and top tourist contributor.
- India extended grants and concessional loans; key infrastructure and digital projects (e.g. housing, Kankesanthurai Port, Digital ID).
- Sri Lanka's Importance to India: Located near key Indian Ocean trade routes (Palk Strait), Sri Lanka is essential to India’s maritime security and energy lifelines.
- Sri Lanka has a central place in India’s ‘Neighbourhood First’ policy and MAHASAGAR (Mutual and Holistic Advancement for Security and Growth Across Regions) vision.
- Sri Lanka acts as a buffer in countering Chinese strategic encirclement through the Belt and Road Initiative (BRI) and port developments (e.g., Hambantota).
- Additionally, Sri Lanka has supported India’s candidature for a non-permanent seat at the UN Security Council (2028–29).
- As an active member of regional platforms like BIMSTEC, Indian Ocean Rim Association, Sri Lanka plays a key role in regional cooperation.
What are the Challenges in India-Sri Lanka Relations?
- Chinese Presence in Sri Lanka: China’s BRI projects, like the 99-year lease of Hambantota Port (Sri Lanka), raise Indian concerns over strategic encirclement.
- Frequent visits by Chinese surveillance ships near Indian waters highlight geopolitical sensitivities.
- Katchatheevu Island: The recurring arrests of Indian fishermen near Katchatheevu Island by the Sri Lankan Navy, over alleged maritime boundary violations, continue to remain a pressing issue.
- Katchatheevu Island, ceded by the Indian administration to Sri Lanka under 1974 Indo-Sri Lankan agreement, which barred fishing in each other’s Exclusive Economic Zones, however, while the pact permitted limited access for Indian fishermen, differing interpretations of its terms have led to persistent disputes.
- Ethnic Reconciliation: The 13th Amendment to the Constitution of Sri Lanka was enacted in 1987 following the Indo-Sri Lanka Accord.
- It aimed to devolve powers to provincial councils, particularly in Tamil-majority areas. However, Sri Lanka's failure to fully implement this amendment, especially in the Tamil-majority Northern and Eastern Provinces, is seen as a disregard for Tamil political rights.
- Sinhala nationalists oppose devolution, while Tamil groups demand broader autonomy, placing India in a diplomatic bind
- Domestic Political Sensitivities: Domestic political narratives significantly influence foreign policy in both India and Sri Lanka. In India, Tamil Nadu plays a crucial role in shaping policy toward Sri Lanka.
- Conversely, in Sri Lanka, certain political factions, particularly leftist parties, have historically exploited anti-India sentiments.
What Can be Done to Enhance India-Sri Lanka Relations?
- Technology for Economic Growth: Sri Lanka’s growing IT sector offers an opportunity for India to invest in and integrate its services with Sri Lanka’s digital economy.
- Investment in Renewable Energy: India’s expertise in solar and wind energy can help Sri Lanka reduce its dependence on fossil fuels and develop sustainable energy infrastructure.
- Economic and Trade Cooperation Agreement (ETCA) Implementation: Swift implementation of ETCA can reduce trade barriers and boost India-Sri Lanka bilateral trade.
- Enforcing Maritime Regulations: Enhanced patrolling along the International Maritime Boundary Line (IMBL) and a dedicated Joint Working Group can help curb illegal fishing and ensure continuous dialogue.
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Drishti Mains Question: What are the challenges in India-Sri Lanka bilateral relations? Suggest a roadmap for deepening the partnership. |
UPSC Civil Services Examination, Previous Year Questions (PYQs)
Prelims
Q1. Elephant Pass, sometimes seen in the news, is mentioned in the context of the affairs of which one of the following? (2009)
(a) Bangladesh
(b) India
(c) Nepal
(d) Sri Lanka
Ans: (d)
Mains
Q2. In respect of India-Sri Lanka relations, discuss how domestic factors influence foreign policy. (2013)
Q3. ‘India is an age-old friend of Sri Lanka.’ Discuss India's role in the recent crisis in Sri Lanka in the light of the preceding statement. (2022)
