India - Sri Lanka Relation

Background & History

● India and Sri Lanka have a legacy of intellectual, cultural, religious and linguistic interaction and
the relationship between two countries is more than 2500 years old.
● Trade and investment have grown and there is cooperation in the fields of development,
education, culture and defence.
● In recent years, significant progress in the implementation of developmental assistance projects
for Internally Displaced Persons (IDPs) and disadvantaged sections of the population in Sri
Lanka has helped further cement the bonds of friendship.
● The nearly three-decade-long armed conflict between Sri Lankan forces and the LTTE came to
an end in May 2009. During the course of the conflict, India supported the right of the
Government of Sri Lanka to act against terrorist forces.
● India's consistent position has been in favour of a negotiated political settlement, which is
acceptable to all communities within the framework of a united Sri Lanka and is consistent
with democracy, pluralism and respect for human rights.

India-Sri Lanka Accord (ISLA)

● The India-Sri Lanka Accord, also known as the Indo-Sri Lanka Peace Accord, was a
bilateral agreement signed in July 1987 between India and Sri Lanka to resolve the
ongoing civil war in Sri Lanka.
● The accord was signed by Indian Prime Minister Rajiv Gandhi and Sri Lankan President
J. R. Jayewardene.

● The accord aimed to address the long-standing demands of Sri Lanka's Tamil minority
for greater autonomy and rights.
● It proposed the creation of a North-East Provincial Council, which would have
significant autonomy over local affairs, and the deployment of Indian peacekeeping
forces in Sri Lanka to monitor the ceasefire and assist in disarmament.

● The accord was met with mixed reactions in Sri Lanka, with many Tamils welcoming it
as a step towards resolving their grievances, while Sinhalese nationalists and the
Liberation Tigers of Tamil Eelam (LTTE) opposed it.

● The Indian Peace Keeping Force (IPKF) was deployed as a part of the accord, but failed
to disarm the LTTE and the operation resulted in heavy casualties on both sides.
● The IPKF withdrew from Sri Lanka in 1990, and the accord ultimately failed to bring
lasting peace to the country.
Importance of Sri Lanka

1. Geostrategic location: Sri Lanka's location at the crossroads of major international sea routes in
the Indian Ocean is of great importance to India, as it is a key point for trade and security in the
region.

2. Cultural and historical ties: India and Sri Lanka have a long history of cultural, religious and
linguistic ties.

3. Tamil population: Sri Lanka's Tamil population, which has historical, cultural, and political ties to
India, is a concern for India. India has been involved in peacekeeping efforts in Sri Lanka and has
provided economic and humanitarian assistance to the country.

4. Maritime boundary agreement: India and Sri Lanka have a maritime boundary agreement which
is significant for the Indian Navy to protect its trade routes and SL Navy to protect its Exclusive
Economic Zone.

5. Economic interests: India has significant economic interests in Sri Lanka, including trade and
investment, and has been actively involved in Sri Lanka's development and infrastructure
projects.

6. Security Interests: Sri Lanka's stability and security are important for India as it shares a
maritime boundary with the country, and any instability in Sri Lanka can have security
implications for India.

7. Terrorism: Sri Lanka is an important partner in the fight against terrorism, and India has been
working closely with Sri Lanka to counter-terrorism in the region.

8. Countering China's influence: Sri Lanka's geo-strategic location can also be used by China to
establish its naval bases, and India's engagement with Sri Lanka can be used as a counterbalance
to China's growing influence in the region.
● China is building state-of-the-art gigantic modern ports all along the Indian Ocean to the
south of it, in Gwadar (Pakistan), Chittagong (Bangladesh, Kyauk Phru (Myanmar) and
Hambantota (Sri Lanka).
● China’s string of pearls strategy is aimed at encircling India to establish dominance in the
Indian Ocean.
● Post-2015, Sri Lanka still relies heavily on China for the Port city project and for the
continuation of Chinese-funded infrastructure projects in Sri Lanka.
Commercial Relations

● India and Sri Lanka enjoy a vibrant and growing economic and commercial partnership, which
has witnessed considerable expansion over the years.

● India has traditionally been among Sri Lanka’s largest trade partners and Sri Lanka remains
among the largest trade partners of India in the SAARC.
○ In 2020, India was Sri Lanka’s 2nd largest trading partner with the bilateral
merchandise trade amounting to about USD $ 3.6 billion.
○ Widening of the balance of trade: Sri Lankan exports to India have increased
substantially since 2000 when ISLFTA came into force
○ and more than 60% of Sri Lanka’s total exports to India over the past few years have
used the ISFTA benefits.
○ Interestingly, only about 5% of India’s total exports to Sri Lanka in the past few years
have used the ISFTA provisions, thereby indicating their overall competitiveness in the
Sri Lankan market.

● In addition to being Sri Lanka’s largest trade partner, India is also one of the largest contributors
to Foreign Direct Investment in Sri Lanka

Indo-Sri Lanka Free Trade Agreement (ISFTA)

● The Indo-Sri Lanka Free Trade Agreement (ISFTA), which was signed on 28th December 1998
and entered into force with effect from 1st March 2000, provides duty-free concessions to a
wide range of products traded between the two countries.
● The basic premise in signing the ISFTA was asymmetries between the two economies, local
socio-economic sensitivities, safeguard measures to protect domestic interests, and revenue
implications so as not to impact high revenue-generating tariff lines in the short term.
● In a nutshell, India sought to do more without insisting on strict reciprocity from Sri Lanka.
Developmental Cooperation

Sri Lanka is one of India’s major development partners and this partnership has been an important
pillar of bilateral ties between the two countries over the years.

1. With grants alone amounting to around USD 570 million, the overall commitment by GOI is to
the tune of more than USD 3.5 billion.
● Demand-driven and people-centric nature of India’s development partnership with Sri
Lanka have been the cornerstone of this relationship

2. The Indian Housing Project, with an initial commitment to build 50,000 houses in war-affected
areas and estate workers in the plantation areas, is the Government of India (GoI)’s flagship
grant project in Sri Lanka.

3. The country-wide 1990 Emergency Ambulance Service is another flagship project.

● The Service which was initially launched in July 2016 in Western and Southern Provinces
of Sri Lanka was later expanded to all the Provinces in the next phase.

4. Projects under Lines of Credit: Lines of credit (LOC) have been extended to Sri Lanka by the
Export-Import Bank of India in the last 15 years.
● Important sectors in which Projects have been executed/ are under execution, under
these LOCs include Railway, transport, connectivity, defence, and solar.

Cultural relations:
● India and Sri Lanka have a shared legacy of historical, cultural, religious, spiritual and linguistic
ties that is more than 2,500 years old.
● In contemporary times, the Cultural Cooperation Agreement signed by the Government of India
and the Government of Sri Lanka on 29 November, 1977 at New Delhi forms the basis for
periodic Cultural Exchange Programmes between the two countries.

People-to-people ties
● Buddhism is one of the strongest pillars connecting the two nations and civilizations from the
time when the Great Indian Emperor Ashoka sent his children ArhatMahinda and
TheriSangamitta to spread the teachings of Lord Buddha at the request of King
DevanampiyaTissa of Sri Lanka.

● Underlining the deep people-to-people connection and shared Buddhist heritage between India
and Sri Lanka, the venerated relics of Lord Buddha from Kapilawasthu discovered in 1970 in
India have been exhibited two times in Sri Lanka.
 ● The venerated relics from the WaskaduweVihara have also been exhibited in India in October
2015 to celebrate the 60th anniversary of Dr Ambedkar, the architect of the Indian Constitution,
embracing Buddhism along with 500,00 followers, where over 8 million people came to see the
relics and paid homage.

● First of its kind grant announcement by India: Prime Minister Shri Narendra Modi during the
Virtual Bilateral Summit held between India and Sri Lanka on 26 September 2020, announced a
USD 15 million grant assistance for protection and promotion of Buddhist ties between India
and Sri Lanka.

● Swami Vivekananda Cultural Centre (SVCC)

The Swami Vivekananda Cultural Centre (SVCC), the cultural arm of the High Commission of India,
Colombo, has been playing a key role in strengthening these ties and promoting people-to-people
contacts between India and Sri Lanka since its inception in 1998. SVCC actively promotes awareness of
Indian culture by offering classes in Bharatnatyam, Kathak, Hindustani and Carnatic vocal, Violin, Sitar,
Tabla, Hindi and Yoga.

Indian Community

● The People of Indian Origin (PIOs) comprise Sindhis, Borahs, Gujaratis, Memons, Parsis,
Malayalis and Telugu speaking persons who have settled down in Sri Lanka (most of them after
partition) and are engaged in various business ventures.
● Though their numbers are much lesser as compared to Indian Origin Tamils (IOTs), they are
economically prosperous and are well placed.
● Each of these communities has their organization which organizes festivals and cultural events.
● The IOTs are mostly employed in either tea or rubber plantations in Central, Uva and
Sabaragamuwa Provinces though during the last decade, the younger generation has been
migrating to Colombo in search of employment.

Defence and Security Cooperation

● India and Sri Lanka conducts joint Military ( 'Mitra Shakti') and Naval exercise (SLINEX).
● India also provides defence training to Sri Lankan forces.
● A trilateral maritime security cooperation agreement was signed by India, Sri Lanka and the
Maldives to improve surveillance, anti-piracy operations and reducing maritime pollution in
Indian Ocean Region.
● In April 2019, India and Sri Lanka also concluded agreement on countering Drug and Human
trafficking.
Major challenges in the relationship between India and Sri Lanka

1. Fishermen issue
● Given the proximity of the territorial waters of both countries, especially in the Palk Straits and
the Gulf of Mannar, incidents of straying of fishermen are common.
● Both countries have agreed on certain practical arrangements to deal with the issue of bona fide
fishermen of either side inadvertently crossing the International Maritime Boundary Lin
● India and Sri Lanka have agreed to set up a Joint Working Group (JWG) on Fisheries between
the Ministry of Agriculture and Farmers Welfare of India and Ministry of Fisheries and Aquatic
Resources Development of Sri Lanka as the mechanism to help find a permanent solution to the
fishermen issue.

2. China's influence: Sri Lanka's geo-strategic location can also be used by China to establish its
naval bases, and India's engagement with Sri Lanka can be used as a counterbalance to China's
growing influence in the region.
● China is building state-of-the-art gigantic modern ports all along the Indian Ocean to the
south of it, in Gwadar (Pakistan), Chittagong (Bangladesh, Kyauk Phru (Myanmar) and
Hambantota (Sri Lanka).
● Sri Lanka also handed over the strategic port of Hambantota, which is expected to play a
key role in China’s Belt and Road Initiative, to China on a 99-year lease.
● China’s string of pearls strategy is aimed at encircling India to establish dominance in the
Indian Ocean.
● Post-2015, Sri Lanka still relies heavily on China for the Port city project and for the
continuation of Chinese-funded infrastructure projects in Sri Lanka.

● India is also investing into Sri Lanka’s infrastructure development in the Northern and Eastern
provinces.
● India is also planning to build Trincomalee Port to counterweight the Chinese developments
at Hambantota Port.

3. Ethnic conflict: The Tamil minority in Sri Lanka has long demanded greater autonomy and rights,
which has led to a civil war and ongoing tensions.