Why in the News?

Sri Lankan President reaches Delhi on maiden foreign tour after taking office.

Key Announcements of the Meet

• Continuation of discussions on the Economic & Technological Cooperation Agreement (ETCA).
  • It would build on the free trade agreement (FTA) that was implemented in 2000.
• Explore the possibility of jointly working on rehabilitation of Kankesanthurai port in Sri Lanka with grant assistance from the Government of India.
• Expedite implementation of India-funded grant project of Sri Lanka Unique Digital Identity.
• MOU on a protocol to amend the Double Taxation Avoidance Agreement (DTA) to bring the DTA in line with international standards on prevention of tax treaty abuse. 
• Other announcements:
  • Support the development of Trincomalee as a regional energy and industrial hub.
  • Early finalization of the proposed bilateral Social Security Agreement.
  • Assistance of USD 14.9 million by India to undertake a Signaling System in the Maho Anuradhapura segment of Sri Lankan railways.
  • Comprehensive scholarship program for 100 economically disadvantaged students.
  • MOU to train 1500 Sri Lankan civil service officers.

Significance of India- Sri Lanka bilateral Relations

For both Nations

• Mutual Support at international forums: 
  • India's support for Sri Lanka's application to become a member of BRICS. 
  • Sri Lanka has extended its support to India's candidature for a non-permanent seat on the UN Security Council for 2028-29.
• Shared maritime security interests in the Indian Ocean Region: Both are committed to countering traditional and non-traditional threats as well as to ensure a free, open, safe and secure Indian Ocean Region.
• Energy cooperation: Several projects are at different stages of discussions, for instance, plans for inter-grid connectivity, a multi-product petroleum pipeline between the two countries, supply of LNG, and the under-preparation Sampur Power Project. 
• Regional and multilateral cooperation: Both are part of Indian Ocean Rim Association (IORA), and BIMSTEC.
• Military Collaboration: Joint exercises like SLINEX (Naval) and MITRA SHAKTI (Army) are held annually. 
  • Sri Lanka also participates in MILAN the multilateral naval exercise hosted by the Indian Navy. 

For Sri Lanka

• Role of India in Debt Restructuring:
  • Financial aid: Nearly USD 4 billion was provided by India in various kinds of aid in 2022 and 2023 to help the country navigate its economic crisis. (see infographic)
  • Co-chair of Official Creditors' Committee (OCC): OCC was formed in 2023 by 17 countries, co-chaired by India, Japan, France, to discuss Sri Lankan debt treatment
    • Includes Paris Club creditors and official bilateral creditors.
  • International Monetary Fund (IMF) bailout: India was among the first countries to provide financing assurances to IMF, a prerequisite for the IMF's $2.9 billion bailout package approved in 2023.
  • Conversion of line-of-credit to grant assistance: India extended USD 20.66 million as grant assistance to settle the payments related to seven completed line-of-credit projects in Sri Lanka.
    • Further project that for the rehabilitation of Kankesanthurai Port in the northern province will now be executed through a grant.
• Economic importance: India has been Sri Lanka's largest trade partner, top FDI contributor, and largest source of tourists.
• Other key areas of support from India:
  • India acts as a 'first responder' for Sri Lanka in the field of Humanitarian Assistance and Disaster Relief.
  • India supports Colombo Security Conclave, backing Sri Lanka's regional security initiatives.
  • Capacity Building including installation of the Maritime Rescue Coordination Centre (MRCC) under an Indian grant.
  • Cultural support like restoration of the Thiruketheeswaram Temple in Mannar and exposition of sacred Kapilavastu Relics in 2012.

For India

• Security of Indian Ocean: Sri Lanka is India's closest maritime neighbour and plays crucial role in preventing territorial actions inimical to India's security/stability.
• Alignment with India's policy: Central place in India's 'Neighbourhood First' policy and Security and growth for all in the region (S.A.G.A.R) vision. 
• Indian Origin Tamils (IOTs):  Around 1.6 million IOTs, primarily employed in tea and rubber plantations, with a significant presence in Colombo's business sector.

Challenges in India-Sri Lanka Relations

• Chinese Strategic Presence in Sri Lanka: Several developments may have security implications for India.
  • China's growing influence through financial aid and projects like Hambantota Port increases its leverage over Sri Lanka, impacting India's interests.
  • Chinese vessels (Shi Yan-6, Yuan Wang-5) conduct data collection activities may potentially aid future military operations against India.
• Fishermen Disputes: Sri Lanks opposes use of bottom trawlers by Indian fishermen and frequent entry into Sri Lankan waters citing concerns regarding environmental damage and overfishing.
  • Also, territorial dispute over this Kachchatheevu Island, ceded to Sri Lanka in 1974, remains a contentious issue, with Indian fishermen claiming traditional fishing rights.
• Delayed Implementation of the 13th Amendment: The amendment was a result of Indo-Lanka Accord (1987), aimed at resolving ethnic conflict through devolution of power.
  • Contentiousness: Sinhala nationalists oppose it as an imposition; Tamil groups seek broader powers.
  • India's Role: India pushed for devolution, but Sri Lanka's reluctance, especially on land and police powers, remains.

Way Forward

• India's Five "S" approach to the world: Samman (Respect), Samvad (Dialogue), Sahyog (Cooperation), and Shanti (Peace); to create conditions for universal Samriddhi (Prosperity).
  • India's 'Neighbourhood First Policy' and SAGAR policy should be the guiding force in tackling inimical Chinese attitude in and around the Indian Ocean. 
• Proposed solution towards resolving Fishing Issue:
  • Shared Fishing Zones: Allow Indian fishermen to fish within 5 nautical miles of the International Maritime Boundary Line in exchange for Sri Lankan access to India's Exclusive Economic Zone.
  • Regulated Trawling: Limit trawling to twice a week, reduce fishing hours, and enforce a 3-nautical-mile distance from the Sri Lankan coast & ultimately enforce a strict ban on bottom trawling.
  • Leasing Kachchatheevu: Sri Lanka could lease the island to India, maintaining ownership while allowing Indian fishermen to fish in its waters.
• 13^th Amendment: Present Sri Lankan government could use this opportunity to devolve powers to the provinces.