The elephant in the room in Indo-Sri Lankan relations is China
Indian External Affairs Minister Subrahmanyam Jaishankar’s parleys with Sri Lanka’s new left-nationalist leaders on 4 October were cordial, but India-Lanka relations will continue to be troubled by the looming Sino-Indian conflict.
Jaishankar had a single-point agenda in Colombo – to convince a sceptical Sri Lankan President, Anura Kumara Dissanayake, of India’s capabilities and how it can contribute to Sri Lanka’s economic growth and prosperity without asking it to compromise its sovereignty. It was a challenging task, given the latent and longstanding distrust in the relationship.
The visit took place in the immediate aftermath of the 21 September Sri Lankan Presidential election, in which the radical leftist and pro-China underdog, Anura Kumara Dissanayake of the National Peoples’ Power (NPP), defeated stalwarts like incumbent President Ranil Wickremesinghe and Sajith Premadasa, leader of the large Samagi Jana Balawegaya (SJB) party.
Unlike Wickremesinghe and Premadasa, who had no ideological angularities either in their domestic or foreign policy, Dissanayake has long been engaged in ideological politics. He has been a longstanding campaigner against “Indian domination”.
The NPP, a 21-party alliance, is avowedly moderate. However, its core is the Janatha Vimukthi Peramuna (JVP), which has maintained a strong anti-Indian stance since its founding in 1965. Dissanayake is the current JVP supremo.
Articulating the NPP’s policies ahead of the Presidential election, its spokesman (and the present Foreign Minister) Vijitha Herath told Ceylon Today that a JVP delegation had told Jaishankar earlier this year that under an NPP government, foreign-funded or foreign-executed projects would have to go through a transparent and public tendering process.
Herath was decrying past projects that were farmed out to foreign parties with nothing more than a cabinet decision under the category of “Strategic Projects”. He said such handing out of projects was a source of huge corruption.
In the case of India, the West Container Terminal project at Colombo port was given to Adani Ports, and two wind power projects in northern Sri Lanka were awarded to the Adanis and another Indian company, under pressure from New Delhi.
Herath assured that the existing projects would be allowed to proceed as they were a done deal, but future projects would have to go through a transparent tendering process. Indications are that the same stringent conditions will apply to all foreign-funded projects, including those funded by China. Deviation from his much-trumpeted rectitude will be difficult for Dissanayake.
Seeing the writing on the wall, Jaishankar went beyond hard selling India’s economic capabilities and also displayed humility in doing so. This was evident in his message on the social media platform X from Colombo, where he said that he took “guidance” from President Dissanayake on India-Lanka relations. “Appreciate his warm sentiments and guidance for the India-Sri Lanka relations,’ Jaishankar posted after his talks with the President.
Jaishankar sought to assuage Sri Lankans’ anxieties about Indian domination in security matters. The official Indian readout said that Jaishankar and Dissanayake “recognised the importance of continuous dialogue on security and defence to promote trust, transparency and mutual sensitivity.”
Sino-Indian Conflict
India-Sri Lanka relations are not confined to the two countries; there is an elephant in the room: China’s presence, whether real or imaginary. India objects to Chinese projects and visits from Chinese oceanographic research vessels on security grounds.
India views the Chinese-built and operated Hambantota port, as well as the establishment of a power plant in North Sri Lanka by Chinese companies, as security threats. It also perceives the setup of a radar station at Ruhunu University on the southern coast as a potential threat.
With the economic giant China in mind, Jaishankar provided a tutorial to Dissanayake on India’s capabilities and what India can do for Sri Lanka’s development in the fields of energy production and transmission, fuel and LNG supply, connectivity, digital public infrastructure, health, and dairy development.
On Sri Lanka’s debt restructuring efforts, Jaishankar recalled that India had been supportive of Sri Lanka’s economic stability and recovery from the very start. India was the first country to provide financing assurances, which enabled the IMF to finalise the Extended Fund Facility.
Jaishankar confirmed India’s support in the Official Creditors’ Committee for Sri Lanka’s agreement with international sovereign bondholders. India is also willing to expedite the conclusion of its bilateral Memorandum of Understanding (MoU) with Sri Lanka, Jaishankar added.
In his discussions with Foreign Minister Vijitha Herath, Jaishankar said that India has offered to modernise the Kankesanthurai port in northern Sri Lanka through a grant of US$61.5 million. Payments for seven completed Line of Credit projects, totalling US$20 million, could be converted into a grant, he added. Further, India has decided to gift 22 diesel locomotives to Sri Lankan Railways.
In response, Dissanayake said that India’s economic support is critical for Sri Lanka to realize its vision of a prosperous country meeting the aspirations of its people. He referred to the potential for exporting renewable energy to India, as it would help reduce production costs in Sri Lanka. The President also noted the contribution of Indian tourists to the Sri Lanka’s economy, saying that this has the potential to grow further.
Dissanayake took care to assure Jaishankar that Sri Lankan territory will never be allowed to be used in a manner inimical to India’s security interests.
While both India and Sri Lanka appear keen on building a smooth relationship, India’s quest for security against China could clash with Sri Lanka’s aspiration to assert its sovereignty and independence. The clash between these two agendas had soured India-Sri Lanka ties every now and then.
India is very keen on restarting discussions on the Economic and Technology Co-operation Agreement (ETCA). However, as with land connectivity, the ETCA has raised concerns for Sri Lankans who fear Indian domination. In the Sri Lankan mindset, land connectivity or very close economic cooperation would be a recipe for Sri Lanka’s subjugation.
In fact, the projects mentioned by Jaishankar in his discussions with AKD have been in the pipeline for a long time but have not seen the light of day. Sri Lankans tend to agree to Indian proposals and even sign agreements, but they often drag their feet in implementing them.
In the months and years to come, a resurgent India will try to stem the encroachment of China in its neighbourhood, while China will seek to test India’s strength in the region. Sri Lanka, like other South Asian neighbours, will draft China to help it resist New Delhi.
Indian and Chinese Presence
Both India and China are deeply involved in Sri Lanka. The Sri Lankan armed forces have been operating a range of Indian defence equipment, including L-70 guns, Indra Radar, offshore patrol vessels, and army training simulators.
India has provided offshore patrol vessels and, more recently, a floating dock. A Maritime Rescue Coordinating Centre, backed by a US$ 6 million grant from India, has been set up in Colombo. This centre includes seven remote stations along the island’s eastern seaboard, including one close to the Chinese-run Hambantota port.
India is a major trainer of Sri Lankan armed forces personnel, with India-trained officers forming the single largest group in the Sri Lankan armed forces. India regularly conducts military exercises with Sri Lanka, such as Mitra Shakthi with the army and SLINEX with the navy. Indian naval vessels frequently visit Colombo and other ports, even to celebrate Yoga Day. There have also been visits by the aircraft carrier INS Vikramaditya and submarines as part of New Delhi’s power projection.
China’s Presence in Sri Lanka
China’s economic activity has been on the back foot in Sri Lanka since COVID-19 and the Sri Lankan economic crisis in 2020. But China had already invested in major infrastructural projects in Sri Lanka earlier, such as the Hambantota Port, the Katunayake-Colombo Expressway, and the Norochcholai Coal Power Project, among many others, since 2010.
During last year’s financial crisis in Sri Lanka, China’s response was tepid compared to India’s because Sri Lanka owed it US$ 7.4 billion. However, China later agreed to restructure Sri Lanka’s debt, stating that Sri Lanka would not have to immediately repay the principal and interest due for the years 2022 and 2023.
During Sri Lanka’s conflict against Tamil separatists, China sold a significant amount of arms to Sri Lanka. According to the Stockholm International Peace Research Institute, China traded military equipment worth US$749 million since 1959. China’s arms trade with Sri Lanka between 2000 and 2008 amounted to US$ 271 million.
After the war, some submarines and a few naval research vessels visited Sri Lanka, raising concerns in India. Overall, China’s military influence in Sri Lanka is minimal compared to India’s.