ECONOMYNEXT – Indian Prime Minister Narendra Modi’s current two-day state visit to Sri Lanka holds significant implications for both nations and the broader geopolitical landscape. This visit comes at a pivotal moment, addressing various facets of bilateral relations, historical complexities, and regional dynamics.
Crucial Timing
Modi’s visit is strategically timed as Sri Lanka emerges from a severe economic crisis that saw the nation declare bankruptcy in April 2022, with over $83 billion in debt. India’s $4 billion assistance during this period underscores its commitment to stabilizing its neighbour.
Additionally, the growing influence of China in Sri Lanka, exemplified by the 99-year lease of Hambantota port, has raised concerns in New Delhi about regional security and economic interests. By visiting now, Modi aims to reinforce India’s role as a key ally and counterbalance external influences.
Implications for Sri Lanka
For Sri Lanka, Modi’s visit signifies potential advancements in energy, defence, and economic collaborations. Discussions are expected to include agreements on energy projects, such as the development of a regional energy hub in Trincomalee and the export of liquefied natural gas from India. These initiatives could diversify Sri Lanka’s energy sources and reduce reliance on any single foreign partner. Furthermore, defence cooperation talks may lead to enhanced security ties, bolstering Sri Lanka’s defence capabilities amid regional uncertainties.
Historical Suspicions
Historically, segments of the Sri Lankan populace have harboured suspicions toward India, stemming from perceived interferences such as the Indo-Sri Lanka Accord of 1987 and its role in arming and training Northern Tamil youth to wage a war against state security forces. The 1987 accord, which led to the deployment of the Indian Peace Keeping Force, was met with resistance and contributed to strained relations.
Modi’s visit, focusing on mutual respect and cooperation, seeks to alleviate these apprehensions by emphasizing India’s supportive role in Sri Lanka’s development without encroaching on its sovereignty.
Trust Deficit
The trust deficit between India and Sri Lanka has been influenced by past events, including India’s involvement in Sri Lanka’s civil conflict and economic disagreements. Additionally, protectionist measures and regulatory challenges have hindered Sri Lanka’s access to Indian markets, exacerbating economic tensions. Addressing these issues transparently and fostering equitable partnerships are essential steps toward rebuilding trust.
Geopolitical Implications
Regionally, Modi’s visit is a strategic move to counterbalance China’s expanding footprint in Sri Lanka. China’s significant investments, particularly the Hambantota port lease, have positioned it as a formidable presence in the Indian Ocean. By strengthening ties with Sri Lanka, India aims to reassert its influence and promote a multipolar balance in the region, which is crucial for maintaining regional stability and open maritime routes.
Engagement with New Government
The current Sri Lankan government, led by the National People’s Power (NPP) with Marxists Janatha Vimukthi Peramuna (JVP) as its main partner, has historically opposed Indian interventions, notably the 1987 Indo-Lanka Accord. Despite this backdrop, Modi’s visit offers an opportunity to reset relations by focusing on mutually beneficial projects and addressing past grievances through dialogue, thereby laying the groundwork for a more collaborative future.
Navigating Past Challenges
Under Modi’s leadership, certain Indian-led projects in Sri Lanka, such as the East Container Terminal deal and Adani’s renewable energy project, faced strong protests and cancellation or withdrawal. Despite these setbacks, Modi’s visit underscores India’s commitment to re-engaging with Sri Lanka, demonstrating a willingness to navigate past challenges and explore new avenues for cooperation that align with both nations’ interests.
Implications for China
Modi’s visit sends a clear message to China regarding India’s intent to maintain and deepen its influence in Sri Lanka. As both nations vie for strategic partnerships in the region, India’s proactive engagement aims to offer Sri Lanka alternatives, ensuring that it does not become overly dependent on any single foreign power. This approach not only serves India’s strategic interests but also empowers Sri Lanka with diversified international partnerships. (Colombo/April 05/2025)
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