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India-Sri Lanka Relations in the Context of China

In recent years, the dynamics between India, Sri Lanka, and China have become increasingly intricate, drawing significant attention. This blog aims to delve into the multifaceted relationship between these three nations. It particularly focus on understanding India-Sri Lanka Relations in the Context of China.

Historical Perspective of India -Sri Lanka relations:

Buddhism was introduced to Sri Lanka in the 3rd century BCE by Mahinda, Emperor Ashoka’s son, establishing a strong cultural and religious link between India and Sri Lanka.

The Chola dynasty of South India conquered Sri Lanka multiple times in the 10th century CE, leaving a lasting impact on Sri Lankan art, architecture, and language.

India and Sri Lanka gained independence from British rule in 1947 and 1948, respectively, with India assisting Sri Lanka in establishing democratic institutions.

The Liberation Tigers of Tamil Eelam (LTTE) emerged in 1976, leading to armed conflict with Sri Lankan forces from 1983 to 2009.

The 1987 India-Sri Lanka Agreement, which enacted the 13th amendment and deployed the Indian Peace Keeping Force (IPKF) to Sri Lanka, aimed to address the Tamil conflict.

The assassination of former Prime Minister Rajiv Gandhi in 1991 altered India’s stance towards the ethnic conflict in Sri Lanka.

The Civil War in Sri Lanka concluded in 2009 through a military operation.

Tamils and Sinhalese are the primary ethnic groups in Sri Lanka, with tensions between them escalating since before independence.

Post-independence, Sinhalese nationalism aimed to limit Tamil presence in education and civil administration, leading to disenfranchisement of Indian Tamil plantation workers in 1949 and exacerbating Tamil alienation.

Area of co-operation between India- Sri Lanka

Sri Lanka has been a significant destination for Indian direct investment, ranking as one of India’s largest trading partners within SAARC. Bilateral trade notably increased after the implementation of the India-Sri Lanka Free Trade Agreement in March 2000, with trade reaching US $4.93 billion in 2018.

In 2018, Indian exports to Sri Lanka totaled US $4.16 billion, while Sri Lankan exports to India amounted to US $767 million. Key Sri Lankan exports to India include base oil, poultry feeds, and pepper, while major imports from India to Sri Lanka include gas oil, pharmaceutical products, and cement. Tourism plays a vital role in the relationship between India and Sri Lanka, with India being the largest source of tourists for Sri Lanka.

India has made significant investments in Sri Lanka, totaling around USD 1.239 billion across various sectors such as petroleum retail, IT, financial services, real estate, telecommunication, and infrastructure development.

Sri Lanka is a major recipient of development assistance from India, with commitments close to US $3 billion, including around US $560 million in grants. The Indian Housing Project, aimed at building 50,000 houses for war-affected and estate workers, is a flagship project with an overall commitment of over INR 1372 crore.

India and Sri Lanka engage in security cooperation, including the training of Sri Lankan military personnel by India. Joint military training exercises, such as ‘Mitra Shakti,’ have been conducted to enhance interoperability and operational capabilities between the Indian and Sri Lankan armies.

India has also exported military hardware to Sri Lanka. Bilateral maritime exercises, like ‘SLINEX,’ are regularly conducted between the Indian Navy and Sri Lankan Navy to bolster maritime security cooperation.

Also learn about other important army exercises from here.

Sri Lanka relation with China

China stands as Sri Lanka’s largest bilateral creditor, with its loans to the Sri Lankan public sector comprising 15% of the central government’s external debt, indicating Sri Lanka’s heavy reliance on Chinese credit to manage its foreign debt burden.

Over the period of 2006-2019, China has invested approximately USD 12 billion in Sri Lanka’s infrastructure projects, reflecting a significant commitment to development initiatives within the country.

Sri Lanka’s economic challenges may lead to a greater alignment of its policies with China’s interests, as evident in the shifting dynamics of smaller nations in the region.

China’s presence and influence in South Asia and the Indian Ocean are relatively favorable compared to its contentious relationships in Southeast Asia and the Pacific, where it faces opposition from various quarters, including Taiwan and territorial disputes.

Despite initial indications of anti-China sentiment from Maithripala Sirisena upon assuming power, Colombo-Beijing relations have endured, with China effectively managing controversies surrounding projects like the Colombo Port City and Hambantota port.

Notably, a Chinese company has secured a 99-year lease for Hambantota port and associated land, underscoring China’s strategic interests and long-term engagement in Sri Lanka.

Sri Lanka’s membership in China’s Belt and Road Initiative further solidifies the economic ties between the two countries, despite concerns from some quarters about the potential risks of entering a “debt trap.”

China’s threat between India and Sri Lanka relation

Opposition to SAGAR Initiative: The proposed forum for Indian Ocean island countries posed a challenge to India’s SAGAR (Security and Growth for All in the Region) initiative, which outlines India’s strategic vision for the Indian Ocean Region (IOR).

Concerns from Two Engines of Growth: China’s control over Sri Lanka’s Hambantota port via a 99-year lease and Sri Lanka’s decision to establish a Special Economic Zone around the Colombo port city, funded by China, have raised concerns. The Colombo port handles a significant portion of India’s trans-shipment cargo, and these developments could potentially lead to a permanent presence of the Chinese navy in the Indian Ocean, posing national security concerns for India.

Strings of Pearls Strategy: The strategy of encircling India through initiatives like the Hambantota lease and the Colombo Port City project is commonly known as the Strings of Pearls Strategy employed by China.

Influence on Neighbors: Other South Asian nations such as Bangladesh, Nepal, and the Maldives have also turned to China for financing large-scale infrastructure projects, further extending China’s influence in the region.

Countering China: Any dissatisfaction in Colombo with Beijing’s involvement could aid India’s efforts to prevent Sri Lanka from becoming a part of China’s ‘string of pearls’ strategy in the Indo-Pacific, as seen in the cancellation of Chinese energy projects in the Jaffna Peninsula.

What lies ahead?

Enhancing Economic Cooperation: Both nations should strive to reduce trade imbalances and boost economic collaboration by identifying sectors where their interests align and encouraging mutual investments to achieve positive outcomes.

Balancing External Engagements: While it is important to maintain friendly relations with other nations, India and Sri Lanka should prioritize strengthening their bilateral ties and ensure that external forces do not overly influence them.

Strengthening Security Cooperation: Collaborative efforts in security and intelligence sharing can help tackle shared threats and build trust between the two countries, contributing to regional stability.

Addressing the Tamil Ethnic Issue: India can continue engaging with Sri Lanka to safeguard the welfare and rights of the Tamil community. Supporting initiatives for ethnic reconciliation and power devolution is essential for fostering stability and inclusivity.

People-to-People Connectivity: Promoting cultural exchanges, tourism, and educational partnerships can enhance mutual understanding and connectivity between the citizens of both nations, fostering stronger bonds.

India’s strategic interests in the Indian Ocean region necessitate a prioritization of its “Neighbourhood First” policy with Sri Lanka. Leveraging regional platforms like BIMSTEC, SAARC, SAGAR, and IORA offers avenues for cooperation in various sectors. Efforts to restrain Chinese expansion in Sri Lanka through ongoing projects and promoting private sector investments are crucial for maintaining stability. Furthermore, India can harness its soft power in the technology sector to create employment opportunities and boost Sri Lanka’s service economy. Overall, fostering strong bilateral ties with Sri Lanka is imperative for India to uphold its strategic interests and promote regional stability.

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