India-Sri Lanka Relations

GS 2 – International Relation 

India-Sri Lanka relations are defined by a blend of historical connections, strategic partnerships, and economic collaborations. Below is a detailed outline:

1. Historical Ties

• India and Sri Lanka share a long-standing history of cultural, religious, and trade interactions dating back to ancient times.
• Strong cultural connections exist, with many Sri Lankans tracing their heritage to India.
• Buddhism, which originated in India, holds significant importance in Sri Lanka.

2. Economic Cooperation

• India is Sri Lanka’s second-largest trade partner, after China, with bilateral trade reaching $5 billion in 2022.
• Indian Exports: Petroleum products, vehicles, machinery, and textiles.
• Sri Lankan Exports: Tea, spices, and garments.
• India has extended concessional loans for critical projects like the Colombo Port City and housing initiatives for war-affected families.

3. Strategic and Defence Cooperation

• Both nations engage in joint military exercises, such as ‘Mitra Shakti’ (counterterrorism) and ‘Dosti’ (maritime security).
• India provides training, defence equipment, and cooperation on maritime security to counter piracy and secure the Indian Ocean.

4. Trade Agreements

• India-Sri Lanka Free Trade Agreement (ISFTA): Signed in 1998, it enables duty-free exports of over 4,000 Sri Lankan products to India.
• Economic and Technology Cooperation Agreement (ETCA): Inked in 2016, it focuses on trade, investments, and technology sharing.

5. Humanitarian Aid

• During Sri Lanka’s 2022 economic crisis, India provided $4 billion in aid, including credit lines for fuel and essential goods.

6. Tourism

• India remains the largest source of tourists for Sri Lanka, with over 100,000 visitors in 2022.

7. Financial Integration

• Sri Lanka has adopted India’s UPI (Unified Payments Interface), strengthening fintech connectivity.
• The use of the Indian rupee for trade settlements is aiding Sri Lanka’s economic recovery.

Key Issues in India-Sri Lanka Relations

1. Fisheries Dispute

• A long-standing issue in the Palk Strait and Gulf of Mannar, with Indian fishermen often accused of crossing into Sri Lankan waters.
• Arrests and occasional conflicts have strained ties.

1. Katchatheevu Island Dispute

• Background: In 1974, the Katchatheevu Island was recognized as Sri Lankan territory through a bilateral agreement.
• Indian fishermen retained traditional rights for fishing, net drying, and pilgrimage. However, a 1976 pact imposed restrictions on these activities, leading to tensions.

1. Border Security and Smuggling

• The porous maritime boundary has facilitated the smuggling of goods, narcotics, and illegal immigrants.

1. Tamil Ethnic Issue

• India’s concerns about the welfare of the Tamil minority in Sri Lanka remain a sensitive topic, influenced by historical and regional dynamics.

1. China’s Growing Influence

• Concerns: India’s strategic interests face challenges due to China’s investments in Sri Lankan infrastructure, such as the Hambantota Port.
• Examples:
  1. Debt Agreement: In 2023, Sri Lanka reached a deal with China’s EXIM Bank for $4.2 billion of debt relief.
  2. Colombo Port Hub: China Merchants Port Holdings leads the South Asia Commercial and Logistics Hub.
  3. Faxian Charity Project: Distribution of aid to vulnerable communities in Sri Lanka.

India-Sri Lanka relations are marked by mutual interests and shared history but face challenges such as the fisheries dispute, Tamil ethnic concerns, and China’s strategic footprint in the region. Continued cooperation and dialogue are key to overcoming these issues and fostering deeper ties.