India and Sri Lanka Relations

Table of Contents

Introduction

A contract for the construction of “Hybrid Renewable Energy Systems” at Delft or Neduntheevu, Nainativu, and Analaitivu islands off the Jaffna peninsula in Sri Lanka was recently signed between the Sri Lanka Sustainable Energy Authority and the Indian business U-Solar Clean Energy Solutions, which increase India and Sri Lanka Relations.

How Are India and Sri Lanka Relations?

Historical Ties
- Trade, religion, and cultural relations between India and Sri Lanka date back thousands of years.
- The two nations have close cultural links, with many Sri Lankans deriving their ancestry from India. India is the birthplace of Buddhism, which is a significant religion in Sri Lanka.
Financial Assistance from India
- During an extraordinary economic crisis, India sent Sri Lanka help of about USD 4 billion, essential to the country’s survival.
- A severe shortage of foreign exchange reserves caused Sri Lanka to experience the biggest financial crisis since gaining independence from Britain in 1948, which occurred in 2022.
Role in Debt Restructuring
- India has assisted Sri Lanka in restructuring its debt by working with creditors and the International Monetary Fund (IMF).
- India was the first nation to provide its letter of support for Sri Lanka’s debt restructuring and funding.
Joint Vision for Connectivity
- A shared vision, agreed upon by the two nations, places a strong focus on holistic connectivity, encompassing port connection, logistics, People-to-people connectivity, renewable energy cooperation, and grid connectivity for power trading.
Economic and Technology Cooperation Agreement (ETCA)
- Both nations are looking into the potential of an ETCA to connect their economies and promote growth.
Agreement on a Multi-Project Petroleum Pipeline
- The establishment of a multiproduct petroleum pipeline from southern India to Sri Lanka has been agreed upon by both countries.
- The goal of this pipeline is to give Sri Lanka access to a reasonably priced and dependable supply of energy resources. The importance of energy for advancement and economic growth is what is motivating efforts to build the petroleum pipeline.
Adoption of India’s UPI
- With Sri Lanka’s adoption of India’s UPI technology, the two nations’ fintech connection has improved significantly.
- The economy of Sri Lanka has also benefited from the rupee’s usage in trade settlement. These are practical measures to support the growth and recovery of Sri Lanka’s economy.
Economic Ties
- After the US and UK, India is Sri Lanka’s third-biggest export market. The advantages of the India-Sri Lanka Free Trade Agreement are seen in more than 60% of Sri Lanka’s exports. Another significant investor in Sri Lanka is India.
- From 2005 to 2019, India’s foreign direct investment (FDI) totaled over USD 1.7 billion.
Defence
- India and Sri Lanka conduct joint military and naval exercises (Mitra Shakti and SLINEX).
Tourism
- With over 100,000 visitors in 2022, India ranked as Sri Lanka’s main tourism supplier.

What is the Significance of India and Sri Lanka Relations?

Focus on Regional Development
- India’s development is closely connected to that of its neighbors, and Sri Lanka wants to further its development by joining the Southern economy in South Asia.
Geographical Location
- Positioned across the Palk Strait and close to India’s southern coast, Sri Lanka is an important part of the interaction between the two countries.
- Due to Sri Lanka’s strategic location at the intersection of crucial shipping routes, India has critical influence over the Indian Ocean, which is a vital waterway for both trade and military operations.
Ease of Doing Business & Tourism
- Improving digital payment networks between the two countries would facilitate commercial transactions and encourage economic cooperation between Sri Lanka and India.
- This development would facilitate trade while also enhancing connection for traveler interactions between the two countries.

Also read: India-Maldives Relationship: A Diplomatic Conflict

What are the Challenges in India and Sri Lanka Relations?

Fisheries Dispute
- The right to fish in the Palk Strait and the Gulf of Mannar is one of the long-standing disputes between India and Sri Lanka. Authorities in Sri Lanka have frequently detained Indian fishermen on suspicion of breaching the maritime border and fishing illegally in Sri Lankan seas.
- Tensions have resulted from this, as have sporadic confrontations involving fishermen from both nations.
Katchatheevu Island Dispute
- The ownership and usage rights of the uninhabited island of Katchatheevu, which is situated in the Palk Strait between India and Sri Lanka, are at the center of the Katchatheevu dispute.
- Even though fishermen from both nations have previously used the waters, a 1976 supplemental agreement established exclusive economic zones and maritime borders, restricting fishing without express authorization.
Border Security and Smuggling
- Concerns over border security and the smuggling of products, especially illegal immigrants and drugs, have been raised by Sri Lanka’s porous maritime borders with India.
Tamil Ethnic Issue
- India-Sri Lanka ties have been delicately impacted by the ethnic war in Sri Lanka, which mostly affects the Tamil minority. The rights and well-being of the Tamil people in Sri Lanka have long been concerns for India.
China’s Influence
- India has voiced worries about China’s growing geopolitical and economic sway over Sri Lanka, particularly about Chinese investments in infrastructure projects and the expansion of the Hambantota Port. This has occasionally been perceived as posing a threat to India’s regional interests.

Way Forward

Make certain that the project moves smoothly from the planning stage to the implementation stage. Monitoring and assessment should be done regularly to keep tabs on developments, spot problems, and make required corrections.
Engage the community in the development and execution of the project. To guarantee community support and buy-in, this might involve awareness campaigns, capacity-building initiatives, and discussions.
Make environmental sustainability a top priority by carrying out in-depth environmental impact assessments and implementing policies to reduce any adverse effects on regional ecosystems and biodiversity.

Conclusion

India and Sri Lanka share a rich historical and cultural bond, reflected in their robust economic cooperation and strategic partnerships. Despite challenges such as territorial disputes and external influences, both nations are committed to enhancing connectivity, promoting regional development, and addressing mutual concerns. With collaborative efforts and a focus on sustainability, their relations are poised to thrive, benefiting both countries and the broader region.

Frequently Asked Questions(FAQs)

Does Sri Lanka have good relations with India?

India is the nearest neighbor to Sri Lanka. The two nations have had a relationship for almost 2,500 years, during which time they have exchanged ideas, cultures, languages, and religions.

What is the issue between India and Sri Lanka?

The right to fish in the Palk Strait and the Gulf of Mannar is one of the long-standing disputes between India and Sri Lanka. Authorities in Sri Lanka have frequently detained Indian fishermen on suspicion of breaching the maritime border and fishing illegally in Sri Lankan seas.

What is the agreement between India and Sri Lanka?

Summary. When the India-Sri Lanka Free Trade Deal (ISFTA), Sri Lanka’s first bilateral free trade deal, was signed on December 28, 1998, it became a significant historical moment in the country’s commercial ties with India. Starting on March 1st, 2000, the ISFTA came into force.

How is Sri Lanka and India connected?

Adam’s Bridge, also called Rama’s Bridge or Rama Setu, is a string of limestone shoals that connects Mannar Island, which is located off the northwest coast of Sri Lanka, with Pamban Island, also known as Rameswaram Island, which lies off the southeast coast of Tamil Nadu, India.

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