India - Sri Lanka relations

International Relations

The relationship between India and Sri Lanka is more than 2,500 years old.

Both countries have a legacy of intellectual, cultural, religious and linguistic interaction.

In recent years, the relationship has been marked by close contacts at all levels. Trade and investment have grown and there is cooperation in the fields of infrastructure development, education, culture and defence.

In recent years, significant progress in implementation of developmental assistance projects has further cemented the bonds of friendship between the two countries.

The nearly three-decade long armed conflict between the Sri Lankan forces and the LTTE came to an end in May 2009. During the course of the conflict, India supported the right of the Sri Lankan Government to act against terrorist forces.

India's consistent position has been in favour of a negotiated political settlement, which is acceptable to all communities within the framework of a united Sri Lanka and is consistent with democracy, pluralism and respect for human rights.

Commercial Relations

Sri Lanka has long been a priority destination for direct investment from India.

Sri Lanka is one of India’s largest trading partners among the SAARC countries. India in turn is Sri Lanka’s largest trade partner globally.

India’s exports to Sri Lanka amounted to $5.3 billion in 2015-17 whereas its imports from the country were at $743 million.

Trade between the two countries grew particularly rapidly after the India-Sri Lanka Free Trade Agreement which came into force in March 2000.

While Sri Lankan exports to India have increased substantially during the past several years since 2000 when ISFTA came into force.

However, there has been a high growth in India’s exports to Sri Lanka, resulting in a widening of the balance of trade. This is largely because of the lack of export capacity from Sri Lanka to service Indian requirement and also due to increase in imports from India because of competitiveness of our exports.

Issues and Conflicts

In recent years, China has extended billions of dollars of loans to the Sri Lankan government for new infrastructure projects, which is not good for India’s strategic depth in Indian Ocean Region.

Sri Lanka also handed over the strategic port of Hambantota, which is expected to play a key role in China’s Belt and Road Initiative, to China on a 99-year lease.

The opposition parties and trade unions in Sri Lanka have already dubbed the port deal as a sellout of their country’s national assets to China.

China has also supplied arms as well as provide huge loans to Sri Lanka for its development.

China also invested sufficiently in the infrastructure of Sri Lanka, which included building of Colombo international container terminal by China Harbor Corporation.

Way Forward

As both countries have a democratic setup there is scope for broadening and deepening the ties.

Both countries should try to work out a permanent solution to the issue of fishermen through bilateral engagements.

Comprehensive Economic Partnership Agreement (CEPA) must be signed to improve the economic cooperation between both countries .

India needs to focus more on its traditional and cultural ties to improve relations with Sri Lanka.

Starting of ferry services between India and Sri Lanka can improve people to people linkages.

Mutual recognition of each other's concerns and interests can improve the relationship between both countries.