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Context

• PM Modi and Sri Lankan President Ranil Wickremesinghe engaged in extensive discussions during the latter's two-day visit to Delhi.

Highlights of Sri Lankan PM’s Visit to India

Prime Minister Narendra Modi said,

• “Sri Lanka has an important place in both India's 'Neighbourhood First' policy and 'SAGAR' vision.
• Today we shared our views on bilateral, regional, and international issues.
• We believe that the security interests and development of India and Sri Lanka are intertwined.
• India and Sri Lanka have decided to carry out feasibility studies on establishing a petroleum pipeline and a land bridge connectivity project between the two countries.
• Both countries have taken the decision to start passenger ferry services between Nagapattinam in Tamil Nadu and Kankesanturai in Sri Lanka.
• The agreement signed to launch UPI in Sri Lanka will increase Fintech connectivity.
• The economic and technology cooperation agreement between India-Sri Lanka is critical to enhancing bilateral trade and investment in new and priority areas.
• Last year, when Sri Lanka faced an economic crisis, India provided substantial financial support, offering approximately USD 4 billion in assistance. This aid included lines of credit that enabled Sri Lanka to purchase essential commodities such as food and fuel. India's support played a crucial role in helping Sri Lanka overcome its financial difficulties.

INDIA’S NEIGHBOURHOOD FIRST POLICY: https://www.iasgyan.in/daily-current-affairs/neighbourhood-first-policy

SAGAR POLICY: https://www.iasgyan.in/daily-current-affairs/mission-sagar-ix

READ ALL ABOUT INDIA SRI LANKA RELATIONS: https://www.iasgyan.in/daily-current-affairs/india-sri-lanka-ties-11

Sri Lanka’s Strategic Importance for India

• Sri Lanka occupies a geo-strategically important position.
• Because about two-thirds of the world’s oil and half of the world’s container transportation passes through the south of Sri Lanka. Therefore, Sri Lanka, which is strategically located, stands out in terms of the security of maritime communication and trade lines in the Indian Ocean.
• On the other hand, Sri Lanka is home to ports that have the potential to become important maritime hubs in the Indian Ocean. Sri Lanka’s geographical location and strategic ports put it in a good global and regional position.
• The crisis in Sri Lanka makes this difficult. Moreover, the crisis that is hampering Sri Lanka’s economic and political stability could have serious repercussions on India.
• Sri Lanka, which is in an economic crisis, has a lot of difficulties in paying its debts. China is the largest creditor of this country. About one-fifth of Sri Lanka’s total debt consists of payments to China. The country is therefore characterized as a country that has fallen into “China’s debt trap diplomacy.”
• Indeed, Sri Lanka is cited as the country that sets an example for African countries to hesitate and think over and over while taking loans from China. Because Chinese loans they received to carry out large projects are one of the main reasons for the country’s economic crisis. Despite allegations of a debt trap, Sri Lanka has continued to obtain loans from China and work with China to continue its projects in the country. In short, Sri Lanka-China relations have reached a good level.
• On the other hand, India has a security concern due to Sri Lanka’s strategic location and geographical proximity. Because Sri Lanka’s economic and therefore political dependence on China has led to an increase in Chinese influence in the country. It is also discussed whether China, which has leased the operations of the Hambantota Port for 99 years in the short term, will establish a base there. These discussions raise New Delhi’s concerns.
• In addition, due to the sight of a Chinese military ship in the said port, it was claimed that the Chinese Navy ships were supplied by tankers from Sri Lanka. This, of course, worries India. This is because these allegations indicate that this situation may continue. Given the rivalry and problems between India and China and India’s desire to maintain stability, peace and security in the region, Sri Lanka becomes even more important. Because the country, which is geographically close to India, may create a security vulnerability for New Delhi as it is in the economic grip of China.
• Addressing all these issues, India is increasing its humanitarian aid activities and financial support to prevent Sri Lanka from approaching China and to save the country from Beijing. Indeed, since the outbreak of the crisis, India has made a great sacrifice in providing aid and support to Sri Lanka. India’s provision of 4 billion dollars in funding, at least to keep the country’s economy afloat, is an example of this self-sacrifice.
• In addition, India supported Sri Lanka in the IMF in terms of its debt to the International Monetary Fund (IMF) and the restructuring and supplied medicine by sending ships to this country for humanitarian aid.
• New Delhi’s commitment to Sri Lanka is evident from the fact that in a short period, it has provided more financial and humanitarian aid to Sri Lanka than it has ever done in the past. This reveals the value Sri Lanka carries for India in terms of both regional security and peace and stability. Rivalry with Beijing is also causing New Delhi to focus on the issue.
• It can be stated that India not only cares about Sri Lanka due to security concerns but also considers its economic potential. Because this small island country has a serious economic capacity. With seaports through which two-thirds of the world’s oil and a significant portion of maritime trade passes, Sri Lanka could offer long-term economic potential for India.
• The Sri Lankan government, on the other hand, wishes to become an important center by using the geostrategic and economic advantages of its ports, especially the Colombo Port.
• At this point, economic and political cooperation with India may offer new opportunities to Sri Lanka both to develop and expand its ports and to increase its economic and geopolitical importance in regional and global terms.
• One of the most important reasons why Colombo Port was written in the first place is that it is one of the busiest and most active ports in the world. The fact that it is one of the rare ports that provide services for large container transportation in the South Asian region increases this importance even more. Due to the features, this port is preferred over others.
• The Port of Colombo is also seen as a critical transshipment hub for New Delhi as it handles close to half of India’s transshipment cargo.
• In short, Sri Lanka, located just south of India, is very important for New Delhi in terms of security and stability. Therefore, a country in economic crisis and increasingly dependent on China could become a major problem for New Delhi. For this reason, it is seen that India tends to establish a strategic partnership with Sri Lanka.
• On the radar of major powers such as Japan, the US, and the UK, as well as China and India, Sri Lanka has become a hub in the Indian Ocean. For this reason, the financial support that Sri Lanka will receive from India and other countries is considered by many experts as a balance against China. On the other hand, it is also claimed that Sri Lanka could use its relations with China and its strategic position and importance to extract economic support and concessions from India. The adoption of such a strategy for the protection of a small and economically crisis country is considered quite rational.

The China-India-Sri Lanka Triangle

• The foreign policy of China in recent times have been extremely focused on South Asia due to India and the significance of the Indian Ocean. As a countermeasure to hinder India’s emerging power status and to secure its Sea Lanes of Communication, China is now aggressively engaging itself in South Asian states and in Indian Ocean littorals.
• The strategic interest of China towards Sri Lanka gained momentum in this context. The island state is centrally located between West Asia and South-East Asia and possesses abundant natural resources like coal, iron and hydrocarbons.
• Along with the utilisation of these aspects, Sri Lanka enables China in its realisation of the Maritime Silk Road initiative thereby enhancing China’s influence in South Asia and the Indian Ocean. The ability to curb India’s rise and place a check on powers like the United States and Japan further made China to actively acquire Sri Lanka to its side.
• On the other hand, the 2500 years old relation between India and Sri Lanka have a legacy of ‘intellectual, cultural, religious and linguistic interaction’ and continue to cooperate in areas of development, education, trade and culture.
• Both countries remain each other’s largest trading partners and the political, cultural and commercial relations remain intact. Being a major power in South Asia, India proudly projects its Neighbourhood First Policy with pride to bring about mutual growth and development in the region. With the wide-open coastline, securing Sri Lanka is a national security concern for India. Although the bilateral engagements and multilateral forums aid India’s friendly policies in its neighbourhood including Sri Lanka, the increased influence of China in South Asia raises suspicions and concerns for India, which subsequently makes the country adopt countermeasures thereby increasing the threat perception in the already tensed region.
• Meanwhile, Sri Lanka is a non-aligned country and maintains cordial relations with both India and China. This balanced nature provides the island immense possibilities to shift according to its national interests and gain. The narrow gap that arises out of this pivoting nature becomes the platform for power projection for India and China.
• Sri Lanka is caught in between the India-China strategic rivalry of which the island is reaping benefits by playing the ‘China Card’. The economic benefits that China offer to Sri Lanka through infrastructure, port facilities and the Belt and Road Initiative enhances the island’s shift towards China. The historical, cultural and political ties of India and Sri Lanka is undermined with these deep economic relations causing India to re-evaluate its bilateral strengths and adopting new strategies to curb the Chinese influence.

Emerging Contours

• In the post covid world, China is stepping up to provide assistance to Sri Lanka to tackle the effects of the pandemic. Although the debate over the debt-trap diplomacy of China through the BRI is still continuing, the viable economic benefits have the ability to lure Sri Lanka further into the Chinese hands. Meanwhile, India is facing problems in its ties with Sri Lanka regarding the Indian fisherman issue, the growing Chinese presence in Sri Lanka, the ECT project at Colombo Port etc.
• The citizens of Sri Lanka are now increasingly becoming critical of China and its presence in their state and this sentiment can be advantageous to India if it decides to address the bilateral irritants with Sri Lanka.
• India has to limit itself from interfering in the internal matters of Sri Lanka and has to prove that its intentions are not hegemonic in nature. A proactive policy in its South Asian neighborhood with a two-pronged strategy of expressing concerns and strengthening bilateral ties would enable India to regain its status.
• With the rising significance of the Indo-Pacific, powers like the US and Japan are also now closely monitoring Sri Lanka. The Indian Ocean which was thought to act as a Zone of Peace thus now became a Zone of Contestation.
• The stabilizing role of Sri Lanka becomes prominent at this juncture. Maintaining a balance in South Asia amidst the India-China rivalry can be made possible if Sri Lanka adopts a more balanced approach where a multilateral order is realised.
• To enhance the security in the region and to ensure a fast economic recovery from the pandemic, cooperation among powers is vital. Sri Lanka can act as the stabilizer between the powers for the less chaotic region where powers cooperate to have fruitful outcomes and mutual development in the post-covid world.

PRACTICE QUESTION Q. Sri Lanka, which is strategically located, stands out in terms of the security of maritime communication and trade lines in the Indian Ocean. What is Sri Lanka’s Strategic Importance for India? Discuss.

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