India and Sri Lanka hold important position in the Asian continent based on location, people, ethnicity, culture.
The relationship between the two countries were good since their independence until the Sri Lankan Civil War, with the Indian intervention through Indian Peace Keeping Force (IPKF).
The key issues which are important for India are fishermen issue, Kachchatheevu, 13th amendment and the Chinese influence in Sri Lanka.

Sri Lanka is very much close to India and so the Indian fishermen tend to move away into the Sri Lankan waters very often. This is a recurring issue when we follow the news everyday. But the issue arises due to the maritime demarcation between India and Sri Lanka.
In 1974, the Indian government recognized Kachchatheevu as a Sri Lankan territory on a conditional agreement with few provisions for the Indian fishermen.

The Indian government wanted the Sri Lankan government to allow the fishermen from India to use the Kachchatheevu Island for their fishing purposes and also to allow Indians to participate in the St.Antony’s Catholic Church festival which is held yearly once.
The island was given to Sri Lanka without the ratification of the Indian Parliament.
The provisions were included due to political agitations in Tamil Nadu.

It is important to understand the issue which led India into Sri Lanka

Sinhalas are the majority in Sri Lanka with 70% of the population.
The Sri Lankan Tamils, Indian Tamils and Moors are the remaining part of the population.
The conflict between the Tamils and Sinhalas started due to the suppressive Sinhala only Act which recognised only the Sinhalas as the citizens of Sri Lanka and it did not recognise the other ethnic minority communities.
This led to the Sri Lankan Civil War which began on 23rd July 1983 and lasted till 18th May 2009.
Liberation Tigers of Tamil Eelam (LTTE), a militant organisation was formed in 1976 to fight against Sri Lankan government and also to create a nation for the Tamils.
LTTE gained momentum in 1983 with the attacks against the Sri Lankan officials.
They occupied the northern and north eastern parts of the Sri Lanka. LTTE is one of the militant organisation in the world, believed to have been destroyed completely.

The Indian intervention is one of the key issues which had its impact on Indian government.
The Indian military forces were deployed in Sri Lankan territories to ensure peace and security. They were named as Indian Peace Keeping Force (IPKF).
The deployment of IPKF followed the Indo-Sri Lankan Accord signed in 1987 with an aim to end the Sri Lankan Civil War.
However the IPKF and LTTE involved in serious battle for two years till 1989, complete withdrawal of the IPKF happened in 1990.

The amendment aims at creating provincial councils in Sri lanka and enable Sinhalese and Tamil as national languages while preserving English as the link language.
Devolution of power to the provinces.
Merger of the northern and eastern provinces and official status for the Tamil language.

The two nations are members of SAARC , South Asia Co-operative Environment Programme, South Asian Economic Union, and BIMSTEC which helps to improve the cultural and commerce between them.
They signed a bilateral Free Trade Agreement in 2000 which provided huge benefits for both the sides through trading activities.
India and Sri Lanka are signatories of South Asia Free Trade Agreement (SAFTA).
NTPC India will provide assistance to setup a Thermal Power Plant in Sri Lanka which is a key development in the relationship between the two nations.

The Chinese provided all the needs of Sri Lanka with the construction of a huge port in Hambantota.
China- Sri Lanka ties are closely monitored by India as the Island nation is the most important player in the Indian Ocean.
China has built up a good relationship with an aim to control the economic activities in the South Asian region.
But the influence of Chinese in Sri Lanka has given a setback in the country with no development in economy.
Chinese utilize them for naval activities as well.

The change in government in India is a key factor in the relations between India- Sri Lanka.
With election of Maithripala Sirisena as President of Sri Lanka earlier this year and the election of Ranil Wickramasinghe as Prime Minister last month, their visits to India is of strategically important.
The implementation of 13th Amendment, fishermen issue, Chinese influence in the Island nation are the important issues at the moment for India with them.

A Primer on India – Sri Lanka Foreign Relations

By Explains