Foreign Policy Watch: India-Sri Lanka

India and Sri Lanka need to go beyond the stated positions

Explained | International Relations | Mains Paper 2: India & Its Neighborhood - Relations
Note4Students

From UPSC perspective, the following things are important :

Mains level: India Sri Lanka Relations;

Why in the News?

Sri Lankan President Anura Kumara Dissanayake’s visit to India, his first international trip as per tradition, underscores the continuity in India-Sri Lanka bilateral relations.

What are the current China-related challenges in India-Sri Lanka relations?

  • Geopolitical Tensions: Sri Lanka’s historical ties with China, particularly during the Mahinda Rajapaksa regime, have raised concerns in India regarding potential Chinese influence in the region.
    • China’s investment in Sri Lanka, particularly in the Hambantota Port, is closely tied to its broader String of Pearls strategy.
  • Economic Dependency: Sri Lanka’s reliance on Chinese investments has created a “debt trap” scenario, limiting its ability to align with Indian interests fully. The need for economic assistance from both nations complicates Sri Lanka’s foreign policy decisions, as it seeks support without alienating either side.
  • Balancing Act: Sri Lanka is attempting to navigate its relationships with India and China, which often puts it in a difficult position.
    • President Anura Kumara Dissanayake has expressed intentions to strengthen ties with India while maintaining relations with China, indicating a desire for a balanced approach. However, this balancing act is complicated by India’s concerns over Chinese influence and activities in the Indian Ocean.

How can India and Sri Lanka enhance their economic and strategic partnerships?

  • Trade Agreements: There is a push for an upgraded India-Sri Lanka Free Trade Agreement (FTA) to facilitate bilateral trade and investment. This could include provisions for Foreign Direct Investment (FDI) protection and expanded coverage of goods and services.
  • Production-Linked Incentive (PLI) Scheme: Implementing a regional PLI scheme could encourage Indian businesses to invest in Sri Lanka, particularly in sectors like renewable energy and electronics. This initiative would help build regional supply chains and reduce dependency on imports.
  • B2B Engagement: Strengthening business-to-business ties, especially between smaller enterprises, could enhance economic collaboration. This involves increasing participation in trade fairs and fostering connections between businesses in southern Indian states and Sri Lanka.

What role does regional stability play? (Way forward)

  • Security Cooperation: Regional stability is crucial for both nations as they address external threats, particularly from China. Dissanayake’s assurance that Sri Lankan territory will not be used against Indian interests is vital for maintaining security cooperation and trust between the two countries.
  • Economic Recovery: As Sri Lanka recovers from its recent economic crisis, stable relations with India are essential for securing ongoing support from international financial institutions like the IMF. Enhanced cooperation can serve as a model for regional partnerships that promote stability and economic growth across South Asia.
  • Geopolitical Balance:  A collaborative approach can help mitigate risks associated with external influences and ensure that both nations can pursue their national interests without compromising sovereignty.

Mains PYQ:

Q What do you understand by ‘The String of Pearls’? How does it impact India? Briefly outline the steps taken by India to counter this. (UPSC IAS/2013)

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