India - Sri Lanka Relations

Posted 17 May 2025

Updated 20 May 2025

5 min read

Why in the News?

Prime Minister of India was honoured with Sri Lanka's highest civilian award, Mithra Vibhushana during his two-day state visit to Sri Lanka.

Defence cooperation: India and Sri Lanka signed a comprehensive MoU on defense cooperation, consolidating existing understandings into a structured framework.
- Also, Sri Lankan President reaffirmed no use of its territory against India, addressing concerns over China's regional influence.
Energy Collaboration: India, Sri Lanka, and the UAE agreed to jointly develop an energy hub in Trincomalee.
Digital Transformation: Both countries signed MoU on Cooperation in the Field of Sharing Successful Digital Solutions Implemented at Population Scale for Digital Transformation.
- India announced support for Sri Lanka's Unique Digital Identity project.
Grant Assistance: India announced grant assistance for the development of Thirukoneswaram temple in Trincomalee, Sita Eliya temple in Nuwara Eliya, and Sacred City Complex project in Anuradhapura.
Others:
- India agreed on the conversion of 100 million US dollars in loans to grants.
- India announced a 2.4 billion Lankan rupees package for the Eastern Province.
- India also announced comprehensive capacity-building programme in India covering 700 Sri Lankans annually.

Cooperation at International forums: India supports Sri Lanka's application to become a member of BRICS.
- Sri Lanka has extended its support to India's candidature for a non-permanent seat on the UN Security Council for 2028-29.
Shared maritime security interests in Indian Ocean Region (IOR): Both are committed to countering traditional and non-traditional threats and to ensure a free, open, safe and secure IOR.
Energy cooperation: Several projects are at different stages of discussions, for instance, plans for inter-grid connectivity, a multi-product petroleum pipeline between the two countries, supply of LNG, and the under-preparation Sampur Power Project.
Regional and multilateral cooperation: Both are part of, commonwealth Group, Indian Ocean Rim Association (IORA), and BIMSTEC.
Military collaboration: Joint exercises like SLINEX (Naval) and MITRA SHAKTI (Army) are held annually.
- Sri Lanka also participates in MILAN, the multilateral naval exercise hosted by the Indian Navy.

For Sri –Lanka

For India

Financial Aid: Nearly USD 4 billion was provided by India in various kinds of aid in 2022 and 2023 to help the country navigate its economic crisis.
- Indian provided assistance for renovating the Kankesanthurai Port in Jaffna.
IMF Bailout: India was among the first countries to provide financing assurances to IMF, a prerequisite for the IMF's $2.9 billion bailout package approved in 2023.
Economic Importance: India has been Sri Lanka's largest trade partner, top FDI contributor, & largest source of tourists.
Humanitarian Assistance: India acts as a 'first responder' for Sri Lanka in the field of Humanitarian Assistance and Disaster Relief. E.g., During COVID-19 pandemic, India sent 500,000 vaccines to Sri Lanka.

Security of Indian Ocean: Sri Lanka is India's closest maritime neighbour and plays crucial role in preventing territorial actions inimical to India's security/ stability.
Alignment with India's policy: 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.
Indian Origin Tamils (IOTs): Around 1.6 million IOTs, primarily employed in tea and rubber plantations, with a significant presence in Colombo's business sector.

Chinese Influence: China's growing influence through financial aid and projects like Hambantota Port increases its leverage over Sri Lanka, impacting India's interests.
- Chinese vessels (Shi Yan-6, Yuan Wang-5) conduct data collection activities may potentially aid future military operations against India.
Fishermen Disputes: Sri Lanka opposes use of bottom trawlers by Indian fishermen and frequent entry into Sri Lankan waters citing concerns regarding environmental damage and overfishing.
- Also, territorial dispute over this Kachchatheevu Island, ceded to Sri Lanka in 1974, remains a contentious issue, with Indian fishermen claiming traditional fishing rights.
Tamil Ethnic Issue: Slow reconciliation efforts, e.g., delay in implementation of 13^th Amendment (in Sri Lanka's Constitution) post Tamil-Sinhala conflict impact India's domestic politics.
- The amendment was a result of Indo-Lanka Accord (1987). Sinhala nationalists oppose it as an imposition while Tamil groups seek broader powers.

India's Five "S" Approach: Samman (Respect), Samvad (Dialogue), Sahyog (Cooperation), and Shanti (Peace); to create conditions for universal Samriddhi (Prosperity).
Constructive engagement: Establish a permanent bilateral institutional mechanism to address fishermen disputes, moral persuasion and developmental support to push for effective implementation of the 13^th Amendment, etc.
Soft power and cultural diplomacy: Joint promotion of religious tourism under Buddhist circuit and Ramayana Trail with infrastructure support, digital platforms, and diaspora engagement.
Multilateral cooperation: Effective utilization of institutions like BIMSTEC and Indian Ocean Rim Association (IORA) to create common positions on regional maritime security, climate change, and economic integration.