The visit was pivotal in recalibrating relations under Colombo’s new administration. The Janatha Vimukthi Peramuna (People’s Liberation Front, also known as JVP) assumed the top executive role in Sri Lanka for the first time, bringing its Communist ideological framework to governance.
Historically, the JVP has been critical of India’s policies toward Sri Lanka. Thus, the visit offered a vital platform to address mutual concerns and strengthen cooperation in the face of emerging regional and global challenges.
Another significant aspect of the visit was to engage with India—a key development partner and primary responder—in addressing Sri Lanka’s ongoing financial crisis and recovery programmes.
From India’s perspective, the discussions were crucial for understanding the JVP’s policies, particularly regarding minority issues, and exploring ways to address its strategic interests in the region. The visit also aimed to expand this robust partnership and explore new frontiers of cooperation.
India-Sri Lanka Relations
The enduring friendship between India and Sri Lanka is exemplified by the extensive bilateral engagements since the establishment of diplomatic ties.
As India’s closest maritime neighbour, Sri Lanka plays a significant role in India’s Vision SAGAR (Security and Growth for All in the Region). Whether during natural disasters, the COVID-19 pandemic, or the 2022 economic crisis in Sri Lanka, India has consistently been the first to offer assistance.
Economically, India is Sri Lanka’s largest trading partner, with bilateral trade reaching $5.5 billion in 2023-24. India is also a top investor, with cumulative investments of $2.2 billion as of 2023. Furthermore, India has provided $5 billion in concessional loans and $600 million in grants as a development partner.
In defence and cultural spheres, the partnership includes training programmes, joint exercises, equipment provision, high-level visits, and goodwill visits by naval and coast guard vessels.
Visit Takeaways
The visit yielded several positive outcomes, underscored by the establishment of a new framework, ‘Fostering Partnerships for a Shared Future,’ aimed at deepening the comprehensive bilateral partnership.
Prime Minister Narendra Modi reaffirmed India’s unwavering commitment to assist Sri Lanka in its economic stabilisation and growth. His assurance of investment-led grants aimed at alleviating Sri Lanka’s debt burden underscores India’s long-term approach to fostering sustainable opportunities and economic growth in the region.
Key Outcomes
Financial Assistance: India announced $20.66 million in grant assistance to settle payments for seven completed line-of-credit projects and converted a $61.5 million credit project for rehabilitating Kankesanthurai Port into a grant.
IMF Collaboration: India’s pivotal role as co-chair of the Official Creditors Committee and its collaboration with the IMF continues to support Sri Lanka’s debt restructuring efforts.
Connectivity Initiatives
Plans for inter-grid connectivity, a multi-product petroleum pipeline, LNG supply, and progress on the Sampur Power Project.
Introduction of UPI services to boost digital connectivity in Sri Lanka.
Infrastructure and Development
$14.9 million in grant assistance for a signalling system on Sri Lanka’s Maho-Anuradhapura railway segment.
Accelerating the India-funded Unique Digital Identity project to establish a foundational digital ID program akin to India’s Aadhaar system.
Capacity Building
Launching an extensive scholarship program to support 100 economically disadvantaged students.
An MOU for training 1,500 Sri Lankan civil service officers over five years.
Trade and Taxation
Amending the Double Taxation Avoidance Agreement (DTA) to align with global standards, preventing tax treaty abuse.
This visit has set the stage for deeper economic cooperation, strategic alignment, and people-centric partnerships. However, its ultimate success will depend on how effectively these initiatives are implemented and balanced to respect Sri Lanka’s sovereignty while fostering regional stability.
