A spirit of accommodation and bonhomie marked Monday’s talks between Prime Minster Modi and the new Sri Lankan President Anura Kumara Dissanayake.
In much the same way as it wooed the pro-China Maldivian President Mohamed Muizzu, New Delhi is now wooing Sri Lanka’s new pro-Chinese President Anura Kumara Dissanayake with generous and timely financial grants.
Many grants and big-ticket development initiatives were announced by India during the talks between Dissanayake and Indian Prime Minister Narendra Modi, held in New Delhi on Monday.
Both sides candidly stated their interests and concerns but, at the same time, agreed to work around the ticklish ones to put the relationship on a mutually beneficial and durable footing.
Dissanayake and Modi had clearly struck a chord, which was evident in their body language, with Modi putting his hand over Dissanayake’s shoulder in an easy manner, as an elder would do to a younger person. The two were sporting broad smiles as they engaged in their one-on-one interaction.
The bonhomie appeared to emerge from the fact that both Dissanayake and Modi came from the same political stock. Both had humble origins and had risen to the top from the grassroots level, honing their ideas and political skills in the course of a long and arduous political journey.
Mutual empathy and accommodation were evident in the joint communiqué issued at the end of the talks. Being ardently and sometimes fiercely nationalistic, Dissanayake and Modi put forward their countries’ concerns and interests in a definitive manner, even as they compromised on some issues to find middle ground that will serve as a basis for building a sustainable relationship.
What came through from the Delhi parleys was that India and Sri Lanka were aware that their relationship was umbilical and that there was no way they could discard, disregard, or ride roughshod over each other.
Historic Transition
A few years back, such a scenario could not have been imagined. The Janatha Vimukthi Peramuna (JVP), to which Dissanayake belongs, had built itself as an avowedly nationalistic force resolutely opposed to India’s Sri Lanka policy since the 1980s, seeing it as hegemonic.
But with Dissanayake’s ascendance to the leadership of the JVP and the JVP’s metamorphosis into the broad-based National Peoples’ Power (NPP), the equation with India changed almost radically.
In the guise of the “NPP”, the JVP acquired, within a remarkably short period, a wider social, class, ethnic, religious, and geographic constituency. This propelled a small NPP, with only three MPs, to the pinnacle of power in Sri Lanka, namely the Executive Presidency and a majority in parliament. These feats made New Delhi sit up and take notice.
The moment Dissanayake won the Presidential election, against the predictions of conventional political pundits, Indian External Affairs Minister Subrahmanyam Jaishankar rushed to Colombo to congratulate him and made some irresistible offers to build friendship with the new kid on the block before rival China could do so. The fear in India and the West was that Dissanayake, as a pro-China leftist, would continue to be so.
Dissanayake was receptive to Jaishankar, accepting most of the latter’s offers. He also assured Jaishankar that his government would not allow Sri Lanka to be used against India’s security. The allusion was to China’s bid to find a foothold in Sri Lanka with the intention of completing the encirclement of India. By assuring India on its security concerns, Dissanayake addressed New Delhi’s principal concern vis-à-vis Sri Lanka, which is its policy on China.
Comprehensive Partnership
At the Delhi talks, Dissanayake told Modi that he deeply appreciated the unwavering support given by India during and after the unprecedented economic crisis in 2022. He added that he looked forward to India’s continued support. Prime Minister Modi, in turn, assured him of India’s full commitment in this regard.
The two leaders went further and affirmed their commitment to taking the relationship to a “mutually beneficial comprehensive partnership.”
An interesting new element in the joint communiqué was the call for “increased political interactions” and the intensification of “political engagements at both the leadership and ministerial levels.” Seen against India’s failure to foresee and forestall the recent catastrophic events in Bangladesh, where the friendly Sheikh Hasina regime was overthrown by a mass movement, the pledge to “have and intensify” political dialogues with Sri Lankan parties makes sense. The joint communiqué said that the two leaders “underscored the importance of regular parliamentary level exchanges to promote democratic values.”
Economic Assistance
Dissanayake appreciated India’s continued support for the implementation of projects despite the ongoing debt restructuring. He acknowledged India’s decision to extend grant assistance for projects that were originally undertaken through Lines of Credit, thereby reducing Sri Lanka’s debt burden.
The Sri Lankan President thanked Modi for India’s support in stabilising the Sri Lankan economy through “unparalleled and multi-pronged assistance, including emergency financing and forex support worth USD 4 billion.” He acknowledged India’s crucial assistance in Sri Lanka’s debt restructuring process, especially as co-chair of the Official Creditors’ Committee (OCC).
He thanked India for extending financial assistance of US$20.66 million to settle payments due from Sri Lanka for projects completed under existing Lines of Credit, thereby significantly reducing the debt burden at a critical time.
The Kankesanthurai harbour is to be modernised with a grant of US$66.5 million. The signalling system on the Maho-Anuradhapura rail line is to be installed with an Indian grant.
Investment-led Growth
Importantly, the two leaders agreed that a strategic shift from debt-driven models towards investment-led partnerships across different sectors would ensure a more sustainable path to economic recovery.
They took note of the success of the India-Sri Lanka Free Trade Agreement (ISFTA), which had enhanced the trade partnership between the two countries, and called for an expansion of trade ties. Both agreed that it was time to start discussions on the Economic & Technological Cooperation Agreement (ETCA). Previous Sri Lankan governments had negotiated ETCA, only to drop it eventually, fearing Indian domination. It remains to be seen if the Dissanayake government will be any different.
It was also agreed to take forward Indian-Rupee-Sri Lanka Rupee trade and to encourage Indian investments in key sectors in Sri Lanka to enhance exports.
Connectivity
Connectivity is the new buzzword in India, perhaps motivated by China’s successes in using connectivity projects in other countries to develop its geopolitical outreach. However, the argument put forward by India to push connectivity during the Delhi talks was that it would help harness the complementarities between the two economies for mutual economic development.
In this context, only the Kankesanthurai port modernisation and the ferry service between Nagapattinam and Kankesanthurai were mentioned. The proposal for a bridge and road link between India and Sri Lanka was not mentioned, though it had found a place in an earlier Indian communiqué in another context. In the past, Sri Lankan governments have consistently refused to proceed with India’s proposal for a rail and road link across the Palk Strait. In their view, it would impinge on their security due to a more populous and powerful India.
India would also install, free of cost, the signalling system on the rail line between Maho and Anuradhapura.
Energy Projects
India places significant emphasis on energy production and trans-national energy connectivity to ensure energy security. Dissanayake and Modi called for the implementation and expansion of the solar power project in Sampur in Trincomalee district; the supply of LNG from India to Sri Lanka; the establishment of a high-capacity power grid interconnection between India and Sri Lanka; and cooperation between India, Sri Lanka, and the UAE to build a pipeline from India to Sri Lanka. The UAE might supply expertise and/or finance, added Indian Foreign Secretary Vikram Misri in a press conference.
The Indian and Sri Lankan leaders agreed on the “joint development” of offshore wind power projects in the Palk Straits in northern Sri Lanka, “while prioritising environmental protection, including fauna and flora.”
Environmental protection, now agreed to by India, is an important concession to Sri Lanka because the Dissanayake government had wanted Gautam Adani’s wind power project to be reviewed, citing differences over the pricing of power and environmental concerns. However, the pricing issue, which concerns the Sri Lankan government the most, does not find mention in the joint communiqué. This raises the question of whether Dissanayake had agreed to the price as decided by a different regime in 2022.
The two leaders decided to support the development of Trincomalee as a “regional energy and industrial hub.” But this, like many other projects mentioned in the joint communiqué, is an old plan yet to be implemented.
People-Centric Digitisation
Modi’s India has been an ardent proponent of people-centric digitisation, which has helped improve governance, transform service delivery, usher in transparency, and contribute to social welfare. President Dissanayake conveyed his government’s interest in exploring the establishment of similar systems in Sri Lanka with Indian assistance. This is a new India-Sri Lanka initiative.
India also offered to assist the Information Communication Technology Agency of Sri Lanka (ICTA) with mentorship for Sri Lankan start-ups.
Agriculture
Noting President Dissanayake’s emphasis on agricultural modernisation, the two leaders agreed to establish a Joint Working Group to examine possibilities for the comprehensive development of the agricultural sector in Sri Lanka. Both leaders appreciated the ongoing collaboration in the development of Sri Lanka’s dairy sector to ensure nutritional security.
Security Assurance
Recognising shared security interests, both leaders acknowledged the importance of regular dialogue “based on mutual trust and transparency and giving primacy to each other’s security concerns.”
Such an accommodative formulation should assuage the feelings of Sri Lankans who may be apprehensive about the military asymmetry between Sri Lanka and India.
Dissanayake assuaged India’s fears about Sri Lanka becoming a cockpit for Chinese or Pakistani intrigue against it when he stated that Sri Lanka would not permit its territory to be used in any manner inimical to the security of India and regional stability.
India’s primary concern lies with China’s efforts to expand its footprint in Sri Lanka and pose a threat to India’s southern flank.
Defence Agreement
Importantly, both leaders decided to “explore the possibility of concluding a framework Agreement on Defence Cooperation” and foster cooperation in hydrography.
Defence cooperation with India is welcomed in Sri Lanka as far as it concerns training and joint exercises. However, a defence treaty with mutual obligations is a different matter altogether. Sri Lankans are wary of being drawn into conflicts between other countries in which they have no direct stake. Having fought a 30-year war with Tamil separatists and suffered economically, they dread being drawn into another war, especially one not their own.
Chinese Research Vessels
India has raised concerns about visits by Chinese “research” vessels to Sri Lankan harbours. To the Indians, these are “spy” vessels in disguise. In response to India’s concerns, Sri Lanka imposed a year-long moratorium on visits by research vessels from all countries. However, India wanted only Chinese vessels to be barred, putting Sri Lanka in an awkward position vis-à-vis China, a major development partner and creditor.
Foreign Secretary Vikram Misri said that India raised this issue at the Delhi talks and the Sri Lankan side explained that they had some issues that needed to be addressed (with China). India and Sri Lanka finally agreed to continue discussions on the question.
The ball is now in Sri Lanka’s court to find a modus vivendi with China on this issue. However, it appears that India may not make this a sticking point in the relationship, as Dissanayake had categorically assured that Sri Lanka would not allow itself to be used to harm India’s security. The underlying aim of the Delhi talks was to find common ground on various issues and build on them, rather than score points.