Strategic Ties: India-Sri Lanka Partnership

India-Sri Lanka relations are poised for a transformative leap with Indian Prime Minister Narendra Modi’s upcoming visit to Sri Lanka next week, scheduled for April 4-6, 2025. Modi will meet Sri Lankan President Anura Kumara Dissanayake and Prime Minister Harini Amarasuriya at the President’s invitation, aiming to bolster bilateral ties, review ongoing projects, and launch India-funded development initiatives. This visit underscores India’s “Neighbourhood First” policy, emphasising its commitment to supporting Sri Lanka’s economic recovery following the 2022 crisis, with talks expected to centre on infrastructure, renewable energy, and trade enhancement. 

Sri Lanka’s economic stabilisation under Dissanayake and Amarasuriya has sparked enthusiasm among Indian investors, who see potential in tourism, manufacturing, and renewable energy. With inflation declining and the rupee strengthening, the foundation for deeper collaboration is firming up. A key example is the $700 million Indian-backed port terminal project in Colombo, designed to improve connectivity and trade while subtly countering rival influences in the region. 

China’s expanding footprint in Sri Lanka, particularly through the Hambantota Port, remains a significant factor. Leased to China for 99 years in 2017 as part of a debt repayment deal, Hambantota has long been a bone of contention for India, which views it as part of Beijing’s “String of Pearls” strategy to encircle India in the Indian Ocean. Recent developments amplify this concern: the Hambantota International Ports Group has announced a major investment, installing four quay cranes and 13 rubber-tyred gantry cranes to boost capacity to 1 million TEUs. This upgrade positions Hambantota as a formidable competitor to India’s interests, notably the newly opened Vizhinjam Port in Kerala. The Kerala Steamer Agents Association has raised alarms over operational challenges at Vizhinjam, urging swift action as China’s rapid development of Hambantota threatens to overshadow it, intensifying regional port rivalry. 

India’s response blends economic pragmatism with strategic intent. While China offered $4.2 billion in aid during Sri Lanka’s crisis, India’s $4 billion package, coupled with humanitarian aid like fuel and food, has built stronger goodwill. Modi’s visit is also likely to address security cooperation, aiming to counterbalance China’s military presence. Sri Lanka, wary of over-dependence, appears to welcome this competition, leveraging it to diversify its partnerships. 

As Sri Lanka rebuilds, Modi’s engagement with Dissanayake and Amarasuriya could mark a new chapter of collaboration. While China’s influence, epitomised by Hambantota, persists, India’s mix of investment, diplomacy, and historical ties positions it as a key ally, fostering a partnership that navigates regional tensions for mutual prosperity.