Recently, India and Sri Lanka embarked on a four-pronged approach to address rising concerns on food and energy security, aiming to alleviate Sri Lanka’s ongoing economic crisis. This comes after Sri Lanka publicly declared an economic emergency due to soaring food prices, a depreciating currency, and rapidly dwindling forex reserves.
Key Components of the Four-Pillar Initiative
The initiative comprises four main components. These include granting lines of credit for food, medicines and fuel purchases, a currency swap agreement to help Sri Lanka address its balance of payment issues, an early modernisation project for Trinco oil farms pursued by India, and a commitment from Sri Lanka to facilitate Indian investments in various sectors. Each component provides both immediate and long-term solutions to help address the economic challenges faced by Sri Lanka.
Recent Issues Influencing India-Sri Lanka Relations
However, relations between the two nations have not been smooth sailing. Lingering issues include the killing of several Indian fisherman by the Sri Lankan Navy, the cancellation of an MOU signed with India and Japan for the East Coast Terminal project, China’s burgeoning economic presence and influence within Sri Lanka, and the 13th Amendment of the Sri Lankan Constitution which promises to devolve necessary powers to provincial councils addressing the demands of the Tamil population.
Historical India-Sri Lanka Relationship
Dating back more than 2,500 years, India-Sri Lanka relations are characteristically rich in intellectual, cultural, religious, and linguistic exchanges. India has supported Sri Lanka in its counter-terrorism endeavours during civil war and contributed to rehabilitation initiatives post-conflict, such as committing to build 50,000 houses for those affected by the civil war and plantation area estate workers. Furthermore, India has also extended assistance to Sri Lanka through a USD 400 million currency swap agreement during the Covid-19 pandemic, in addition to supplying them with vaccines.
Military and Economic Engagements
The bond further extends into the military realm as well, with both nations participating in joint Military (Mitra Shakti) and Naval exercise (SLINEX). Sri Lanka is also a member of various groupings such as BIMSTEC and SAARC, where India assumes a leading role.
Looking Ahead: Strengthening Relations and Building Trust
Despite the existence of a deep-seated trust deficit between the two countries, maintaining positive relations is crucial for both. As the larger country, India must assume the responsibility of fostering this relationship, demonstrating patience, and refraining from reacting impulsively to potential issues or triggers. It must also engage Sri Lanka more closely and regularly, primarily at senior levels, while respecting its domestic affairs. Underpinning all these efforts is the necessity to increase people-centric developmental activities, which are integral for nurturing the Neighbourhood First policy, thereby enabling India to safeguard its strategic interests in the Indian Ocean region.