India-Sri Lanka Relations: Economic Cooperation
Overview
India and Sri Lanka share a long and intricate relationship, deeply rooted in their geographical proximity and historical connections. Spanning over a century, their bilateral ties have fluctuated between cooperation and conflict, influenced by regional dynamics, internal politics, and international pressures. This article by Academic Block will explores the evolution of India-Sri Lanka relations from the early 20th century to the present day, examining key phases, events, and issues that have shaped their interactions.
Early 20th Century and Independence Era
Colonial Era Influences
In the early 20th century, Sri Lanka, then known as Ceylon, was a British colony, while India was also under British rule. Despite their shared colonial experience, the political and social contexts of the two countries were distinct. India's struggle for independence was marked by a broad-based nationalist movement, while Ceylon's path to independence involved a more gradual process of constitutional reform.
During this period, the interactions between Indian and Ceylonese leaders were limited but significant. Indian leaders like Sardar Patel were aware of the geopolitical importance of Ceylon, which was strategically located in the Indian Ocean. However, formal diplomatic relations were minimal due to the colonial administrations in both countries.
Post-Independence Diplomacy
Sri Lanka gained independence from Britain in 1948, and India had already achieved independence in 1947. The early years of their relationship were characterized by a cautious but cooperative approach. Both nations were eager to establish a stable and peaceful neighborhood, and their initial interactions were focused on fostering friendly ties and mutual respect.
1950s-1970s: Building Ties Amidst Challenges
The Nehru Era
During the 1950s, under Prime Minister Jawaharlal Nehru's leadership, India pursued a policy of non-alignment and sought to build strong regional relationships. India and Sri Lanka engaged in various diplomatic initiatives to enhance bilateral cooperation. The primary focus was on economic and cultural exchanges, with both countries recognizing the benefits of closer collaboration.
However, the relationship faced challenges due to the ethnic tensions within Sri Lanka. The Sinhalese-majority government's policies towards the Tamil minority were a source of concern for India, given the significant Tamil population in the Indian state of Tamil Nadu. India’s attempts to mediate and influence the Sri Lankan government were met with mixed responses.
Sri Lanka's support of Pakistan against India
Between 1960 and 1980, Sri Lanka (then Ceylon) and Pakistan shared strong strategic cooperation primarily aimed against India's growing regional influence. The period saw close diplomatic and military ties between the two countries, especially during the India-Pakistan wars of 1965 and 1971. Sri Lanka, while maintaining a non-aligned stance, allowed Pakistan to use its airspace and refueling facilities during the 1965 war. This support by Sri Lanka helped Pakistan in strengthening its war efforts against India.
The Indo-Pakistani War of 1971, which led to the creation of Bangladesh, further cemented cooperation between Sri Lanka and Pakistan. Despite global condemnation of Pakistan’s actions in East Pakistan (now Bangladesh), Sri Lanka continued its support by once again allowing Pakistani military flights to use Colombo as a refueling stop. This was significant as India had sealed off the air route between East and West Pakistan. Following the war, Pakistan and Sri Lanka continued to collaborate in the realms of trade, defense, and diplomacy. While India’s influence remained prominent, Pakistan still value Sri Lanka as a crucial partner in South Asia.
The 1970s: Rising Tensions
The 1970s witnessed increasing tensions between India and Sri Lanka, primarily due to the escalating ethnic conflict in Sri Lanka. The Sri Lankan government's policies towards the Tamil population, including language and education policies, led to its global condemnation, and widespread unrest. India, with its own Tamil population, was deeply concerned about the situation.
The Indian government, led by Indira Gandhi, became more involved in Sri Lankan affairs. India attempted to address the issue through talks and diplomatic channels, advocating for the rights of Tamils in Sri Lanka. However, these efforts often strained relations with the Sri Lankan government, which viewed India's intervention as an infringement on its sovereignty.
1980s: The Tamil Issue and the Indo-Sri Lanka Accord
The Role of the Tamil Tigers
The 1980s marked a significant turning point in India-Sri Lanka relations due to the rise of the Liberation Tigers of Tamil Eelam (LTTE), a militant organization fighting for an independent Tamil Eelam in Sri Lanka. The LTTE's activities, including attacks on Sri Lankan forces and civilians, exacerbated the ethnic conflict and drew India's attention.
India, under Prime Minister Rajiv Gandhi, initially provided diplomatic support to Tamil militant groups as part of its policy to counteract Sri Lankan government actions. This support, however, led to increased tensions between the two nations. The Sri Lankan government accused India of meddling in its internal affairs, further straining relations.
The Indo-Sri Lanka Accord (1987)
In a bid to resolve the conflict, India and Sri Lanka signed the Indo-Sri Lanka Accord in 1987. The Accord aimed to address the Tamil issue by granting regional autonomy to the Tamil-majority areas in Sri Lanka and deploying Indian Peace Keeping Forces (IPKF) to maintain peace.
The Accord was a landmark in India-Sri Lanka relations, as it demonstrated India’s commitment to resolving the Tamil issue diplomatically. However, the deployment of IPKF was met with resistance from both the LTTE and sections of the Sri Lankan population. The IPKF’s operations, marked by clashes and casualties, led to growing discontent in India and Sri Lanka.
The Withdrawal of Indian Troops
By 1990, India faced increasing criticism over its involvement in Sri Lanka, leading to the decision to withdraw the IPKF. The withdrawal marked a shift in India’s approach towards Sri Lanka, moving from direct intervention to a more diplomatic stance. Despite the withdrawal, the legacy of the IPKF's presence continued to impact bilateral relations.
1990s-2000s: Post-Conflict Relations and Economic Cooperation
The Post-War Period
The 1990s and early 2000s saw a gradual improvement in India-Sri Lanka relations, especially after the end of the civil war in Sri Lanka. The conclusion of the conflict with the defeat of the LTTE in 2009 marked a new phase in bilateral relations. India provided significant humanitarian assistance and support for post-war reconstruction efforts in Sri Lanka.
Economic cooperation became a central focus of the relationship during this period. India and Sri Lanka signed several trade agreements, including the Indo-Sri Lanka Free Trade Agreement (ISFTA) in 1998, which aimed to boost economic ties and trade between the two nations. The ISFTA facilitated increased trade and investment, contributing to economic growth in both countries.
The 2000s: Regional Cooperation and Diplomatic Engagement
The 2000s witnessed a strengthening of bilateral ties through regional cooperation initiatives. India and Sri Lanka engaged in various joint projects, including infrastructure development and capacity-building programs. The Indian government’s support for Sri Lanka’s development efforts was seen as a testament to the growing cooperation between the two countries.
Diplomatic engagement continued, with high-level visits and discussions focusing on enhancing economic collaboration and addressing regional security concerns. India’s assistance in areas such as education, healthcare, and infrastructure further solidified the bilateral relationship.
2010s-Present: Current Dynamics and Challenges
Post-War Reconstruction and Human Rights Concerns
The post-war period presented both opportunities and challenges for India-Sri Lanka relations. While India continued to support Sri Lanka’s reconstruction efforts, there were concerns about human rights violations during the final stages of the civil war. India’s calls for accountability and reconciliation were met with mixed reactions from the Sri Lankan government.
India’s involvement in the international community’s discussions on Sri Lanka’s human rights record demonstrated its commitment to addressing these issues. However, the complex nature of the situation, coupled with domestic political considerations, often influenced India’s approach.
Economic and Strategic Ties
In recent years, economic and strategic ties have remained central to India-Sri Lanka relations. Both countries have continued to enhance their economic collaboration, with India being one of Sri Lanka’s largest trading partners and sources of investment. Joint projects in infrastructure, energy, and technology have contributed to strengthening economic ties.
Strategically, India has sought to maintain a balance in its approach towards Sri Lanka, given the growing influence of China in the region. The Chinese presence in Sri Lanka, particularly through investments and infrastructure projects, has been a concern for India, which views it as a strategic challenge.
Sri Lanka’s Economic Collapse of 2020 - 23, and India's Bailout
China played a significant role in Sri Lanka's financial troubles of 2022-23, primarily due to its extensive infrastructure investments and loans under the Belt and Road Initiative (BRI). From 2020 onwards, China became one of Sri Lanka’s largest lenders, funding large-scale projects like the Hambantota Port, Colombo Port City, and other infrastructure developments. While these projects were "intended" to boost the country's economy, many of them failed to generate any meaningful revenue. The Hambantota Port, for instance, became a symbol of debt diplomacy, as Sri Lanka was forced to lease the port to a China for 99 years after failing to repay the loans. This, coupled with other debt obligations, exacerbated Sri Lanka’s financial vulnerability, with Chinese debt contributing to large portion of Sri Lanka’s overall foreign debt.
Critics argue that China’s predatory lending practices, particularly high-interest loans with short repayment periods, contributed to Sri Lanka’s unsustainable debt burden. When Sri Lanka’s economy collapsed in 2022, China did offer some symbolic assistance, like currency swap and promises of restructuring its loans. However, these measures were not enough to prevent Sri Lanka's default or stabilize its economy. This crisis also highlighted concerns about China's role in creating financial dependency and the risks associated with its lending practices in developing countries. Later, Sri Lanka was forced to seek international assistance, from the International Monetary Fund (IMF) and neighboring countries, to address its financial collapse and avoid a deeper humanitarian crisis.
In 2022 India stepped in as a key partner, providing a substantial financial bailout to help stabilize Sri Lanka’s economy. Between 2022 and 2023, India extended over $5 billion in assistance, which included lines of credit, currency swaps, and humanitarian aid. This aid helped Sri Lanka procure essential goods, such as fuel and food, while also providing temporary relief from its financial woes. India’s support was seen not only as a humanitarian gesture but also as a act of friendship to maintain regional stability.
Political and Diplomatic Relations
The political landscape in Sri Lanka has influenced its relations with India. The change in government in Sri Lanka, with shifts in leadership and policy priorities, has impacted bilateral interactions. India has navigated these changes with a focus on maintaining a cooperative relationship while addressing its strategic and economic interests.
Diplomatic engagements between India and Sri Lanka have continued through high-level visits, dialogues, and joint initiatives. Both countries have emphasized the importance of maintaining a stable and constructive relationship, despite occasional differences and challenges.
Final Words
India-Sri Lanka relations have evolved significantly over the 20th and 21st centuries, shaped by historical connections, geopolitical dynamics, and internal developments. From the early days of cautious cooperation to the complex interactions of the modern era, the relationship between these two South Asian neighbors reflects a blend of shared interests and challenges.
As both countries move forward, their relationship will likely continue to be influenced by regional developments, economic opportunities, and political changes. The ongoing efforts to enhance bilateral cooperation, address historical issues, and navigate strategic concerns will play a crucial role in shaping the future of India-Sri Lanka relations. We would love to hear your thoughts in the comments below to help us make this article better. Your feedback is important to us. Thank you for Reading!
This Article will answer your questions like:
India-Sri Lanka relations date back centuries, rooted in shared cultural, religious, and historical ties. Post-independence, relations were marked by cooperation in various fields, including trade and defense. However, ethnic tensions within Sri Lanka, especially involving the Tamil minority, have impacted bilateral ties, leading to India's intervention in the civil conflict during the 1980s.
The conflict between Sri Lanka and India primarily revolves around the Tamil ethnic issue. India’s support for the Tamil Tigers (LTTE) during the Sri Lankan Civil War, aimed at addressing the plight of Tamils, led to tensions. The Indo-Sri Lanka Accord of 1987 aimed to resolve these issues but also brought challenges, complicating bilateral relations.
The India-Sri Lanka Free Trade Agreement (ISFTA), established in 2000, aims to promote trade by reducing tariffs on goods. This agreement enhances economic cooperation, allowing Sri Lankan products duty-free access to the Indian market and vice versa, fostering bilateral trade and investment, ultimately contributing to economic growth for both nations.
Key events in India-Sri Lanka relations during the 20th century include India’s support for Sri Lanka’s independence in 1948, the rise of ethnic tensions in the 1970s, the signing of the Indo-Sri Lanka Accord in 1987, and the deployment of the Indian Peace Keeping Force to assist in ending the civil conflict, shaping subsequent diplomatic ties.
The Indo-Sri Lanka Accord, signed in 1987, aimed to resolve ethnic tensions by granting autonomy to the Tamil-majority areas in Sri Lanka. While it temporarily eased relations, the subsequent deployment of the Indian Peace Keeping Force faced resistance, leading to mistrust and complexities in bilateral ties, affecting long-term relations.
The Indian Peace Keeping Force (IPKF) was deployed to Sri Lanka in 1987 to implement the Indo-Sri Lanka Accord and restore peace amid the civil conflict. While initially aimed at disarming the LTTE and stabilizing the situation, the IPKF faced resistance and criticism, leading to its withdrawal in 1990 amid escalating tensions.
In the 21st century, economic ties between India and Sri Lanka have strengthened through trade, investment, and cooperation in various sectors. The India-Sri Lanka Free Trade Agreement has facilitated bilateral trade, while Indian investments in infrastructure, energy, and technology have contributed to Sri Lanka's economic development, enhancing overall relations.
Major issues in India-Sri Lanka relations in the 1980s included rising ethnic tensions, with India's support for the Tamil minority and the LTTE, leading to increased conflict. The signing of the Indo-Sri Lanka Accord in 1987 and the subsequent deployment of the Indian Peace Keeping Force significantly impacted bilateral dynamics, causing long-term repercussions.
The end of the Sri Lankan Civil War in 2009 positively impacted India-Sri Lanka relations, allowing for renewed engagement and cooperation. India provided assistance for reconstruction and development, strengthening economic ties. However, issues related to the Tamil minority's rights and reconciliation efforts continue to affect the dynamics of bilateral relations.
The current status of India-Sri Lanka diplomatic relations is generally positive, marked by high-level visits, economic cooperation, and cultural exchanges. However, challenges remain, particularly regarding Tamil minority rights and influence from China in the region. Both nations continue to engage in dialogue to strengthen ties and address mutual concerns.
India generally maintains good relations with Sri Lanka, characterized by economic cooperation, cultural ties, and mutual support on regional issues. Despite historical tensions, both countries have worked to strengthen bilateral ties through trade, investment, and political dialogue, although challenges, such as Tamil rights, persist in the relationship.
India's intervention in Sri Lanka was primarily driven by concerns over the rising ethnic conflict and the humanitarian crisis involving Tamils in the 1980s. The assassination of Indian Prime Minister Rajiv Gandhi by the LTTE in 1991 further complicated relations. India aimed to stabilize the situation through the Indo-Sri Lanka Accord and deployed peacekeeping forces.
Controversies Associated with India-Sri Lanka Relations
The Indo-Sri Lanka Accord (1987): The Accord, aimed at addressing the Tamil issue in Sri Lanka, led to the deployment of Indian Peace Keeping Forces (IPKF). The IPKF’s involvement faced significant resistance from both the LTTE and sections of the Sri Lankan public, leading to strained relations and criticism of India’s intervention.
The IPKF Operations (1987-1990): The operations of the Indian Peace Keeping Force in Sri Lanka were contentious, involving clashes with the LTTE and allegations of human rights abuses. The mission’s failure and eventual withdrawal caused tensions between the two nations and left a lasting impact on their relationship.
Human Rights Violations in the Sri Lankan Civil War: During the final stages of the Sri Lankan Civil War (2006-2009), India faced criticism for its perceived inaction regarding alleged human rights violations by the Sri Lankan government. India’s calls for accountability and reconciliation were often seen as insufficient, impacting diplomatic relations.
Ethnic Tensions and Tamil Eelam: India’s support for Tamil militant groups in Sri Lanka, particularly during the 1980s, led to accusations of meddling in Sri Lankan internal affairs. This support was seen as an attempt to influence Sri Lankan domestic politics, straining bilateral relations.
China’s Increasing Influence in Sri Lanka: In recent years, Sri Lanka’s growing economic and strategic partnership with China has been a point of contention. India views China’s presence in Sri Lanka, through investments and infrastructure projects, as a strategic challenge and a potential threat to its regional influence.
Fishing Disputes: Disputes over fishing rights in the Palk Strait, involving Indian and Sri Lankan fishermen, have led to diplomatic tensions. Incidents of arrests and alleged harassment of fishermen have sparked debates over maritime boundaries and resource management.
Tamil Diaspora and Political Influence: The role of the Tamil diaspora, particularly in Tamil Nadu, in advocating for Sri Lankan Tamils has occasionally influenced India-Sri Lanka relations. The diaspora’s political activism has sometimes put pressure on the Indian government to take a more assertive stance on Sri Lankan issues.
Major Events and Agreements in India-Sri Lanka Relations
Indo-Sri Lanka Accord (1987): Signed on July 29, 1987, this treaty aimed to address the Tamil ethnic issue in Sri Lanka by providing for the devolution of powers to provincial governments and led to the deployment of the Indian Peace Keeping Force (IPKF).
Indian Peace Keeping Force (IPKF) Deployment (1987-1990): India deployed IPKF in Sri Lanka to help enforce the Indo-Sri Lanka Accord and to disarm the LTTE. The mission faced significant challenges and controversies, including clashes with the LTTE and allegations of human rights abuses.
Bilateral Trade Agreements: The Indo-Sri Lanka Free Trade Agreement (ISFTA), signed in 1998, was a significant step in enhancing economic relations, aiming to promote trade and investment between the two countries.
Kachchativu Island Agreement (1974): This agreement settled the maritime boundary dispute between India and Sri Lanka, assigning the Kachchativu island to Sri Lanka and addressing fishing rights issues.
Agreement on the Prevention of Drug Trafficking and Smuggling (1994): This agreement focused on enhancing cooperation between the two countries to combat drug trafficking and smuggling.
Memorandum of Understanding on Economic Cooperation (2003): This MOU aimed to bolster economic ties through various initiatives, including infrastructure development and investment.
Sri Lankan Civil War End (2009): The end of the civil war marked a turning point in India-Sri Lanka relations, with India providing substantial humanitarian aid and support for reconstruction efforts.
Economic and Technical Cooperation Agreements: Various agreements over the years have focused on enhancing cooperation in sectors such as agriculture, education, and technology.
Modi-Rajapaksa Meetings: High-level meetings between Indian Prime Minister Narendra Modi and Sri Lankan President Gotabaya Rajapaksa have focused on strengthening bilateral relations, discussing economic cooperation, and addressing regional security issues.
Joint Statement on Maritime Security (2019): This statement reaffirmed the commitment of both countries to ensure maritime security and address issues related to the Indian Ocean region.
Facts on India-Sri Lanka Relations
Independence and Early Relations: India and Sri Lanka established formal diplomatic relations shortly after Sri Lanka gained independence from Britain in 1948 and India in 1947. Both countries sought to maintain peaceful and cooperative ties from the outset.
Indo-Sri Lanka Accord (1987): Signed on July 29, 1987, this accord aimed to address the Tamil ethnic conflict in Sri Lanka. It provided for the devolution of powers to the provinces and led to the deployment of Indian Peace Keeping Forces (IPKF) in Sri Lanka.
Indian Peace Keeping Force (IPKF): The IPKF was deployed in Sri Lanka from 1987 to 1990 under the Indo-Sri Lanka Accord to stabilize the situation and disarm the LTTE. The mission faced significant challenges and controversy, including allegations of human rights abuses and clashes with the LTTE.
Tamil Eelam Conflict: The conflict between the Sri Lankan government and the LTTE (Liberation Tigers of Tamil Eelam) was a significant factor in India-Sri Lanka relations. India’s support for Tamil groups and later the IPKF’s involvement were major points of contention.
Post-War Assistance: Following the end of the Sri Lankan Civil War in 2009, India provided substantial humanitarian and reconstruction aid to Sri Lanka. India supported various development projects and offered assistance in rebuilding war-affected areas.
Economic Cooperation: India and Sri Lanka signed the Indo-Sri Lanka Free Trade Agreement (ISFTA) in 1998, which aimed to promote trade and economic cooperation. India is one of Sri Lanka’s largest trading partners and investors.
Strategic Competition: In recent years, Sri Lanka’s growing ties with China, including significant Chinese investments and infrastructure projects, have been a point of strategic competition. India views China’s presence in Sri Lanka as a challenge to its regional influence.
Fishing Disputes: Ongoing disputes over fishing rights in the Palk Strait have been a recurring issue. Indian and Sri Lankan fishermen have faced arrests and tensions over maritime boundaries and resource management.
Diplomatic Visits and Engagements: High-level visits and diplomatic engagements have been a regular feature of India-Sri Lanka relations. Leaders from both countries have frequently met to discuss bilateral issues, economic cooperation, and regional security.
Human Rights and Accountability: India has called for accountability and reconciliation regarding human rights violations during the final stages of the Sri Lankan Civil War. These calls have influenced diplomatic interactions and occasionally strained relations.
Academic References on India-Sri Lanka Relations
- Mohan, C. R. (2015). The India-Sri Lanka maritime boundary dispute: Historical background and contemporary issues. Routledge.
- Ravi, K. (2017). India’s policy towards Sri Lanka: An analysis of political and economic dimensions. South Asian Studies, 33(2), 181-199.
- Rajasingham, K. (2012). The Sri Lankan conflict and India’s role: From intervention to reconciliation. Palgrave Macmillan.
- Suryanarayan, V. (2011). The Tamil issue in Sri Lanka and India’s response. Asian Affairs, 42(4), 523-540.
- Mohan, C. R., & Chellaney, B. (2006). India’s relations with Sri Lanka: A historical perspective. Asia-Pacific Review, 13(2), 53-68.
- Kumar, R. (2020). India’s foreign policy and the Sri Lankan civil war: A critical assessment. Journal of South Asian Studies, 41(3), 421-439.
- Hewage, H. (2013). The role of India in Sri Lanka’s post-war recovery. The Diplomat, 25(1), 77-95.
- Ishara, K. (2019). Strategic interests and bilateral relations: India-Sri Lanka in the 21st century. Journal of Asian Security and International Affairs, 6(1), 12-34.
- Sen, S. (2014). The India-Sri Lanka Accord of 1987: A reassessment. Journal of International Relations and Development, 17(2), 206-227.
- Jayaweera, S. (2018). India’s diplomatic engagement with Sri Lanka: Challenges and opportunities. International Journal of Regional Studies, 5(3), 15-30.
- Deshpande, A. (2016). India-Sri Lanka relations: The dynamics of diplomacy and conflict. Routledge.
- Raghavan, V. (2021). The influence of the Tamil diaspora on India-Sri Lanka relations. Asian Journal of Political Science, 29(1), 45-62.
- Bhatia, S. (2012). India’s involvement in Sri Lanka: A historical and political analysis. South Asia: Journal of South Asian Studies, 35(1), 22-39.
- Pillai, K. (2019). Geopolitics and bilateral relations: The case of India and Sri Lanka. Journal of Contemporary Asia, 49(4), 570-589.