Background:

India had traditionally enjoyed strong and close ties with Sri Lanka. But in the wake of victory over the LTTE and after successfully ending the island’s decades-long ethnic war, Mahinda Rajapaksa had started leaning towards China, India’s rival in the region.

 India-Sri Lanka ties underwent a strain for several reasons, while SL-China ties grew in strength.

 The recent elections in SL and the coming back to the power of the Rajapaksa brothers had led to apprehensions in India, casting doubts over the likely chances of SL drawing close to China, with India having to cede strategic dominance in the region.

 However, contrary to the concerns, by making New Delhi their first stop abroad, Sri Lanka’s new President Gotabaya Rajapaksa's visit in November 2019, and Prime Minister Mahinda Rajapaksa's recent visit, have signaled hope for the beginning of a new India-Sri Lanka bilateral relation.

Details:

 Reciprocating Sri Lanka’s desire for better bilateral ties, India too has indicated that it would like to strengthen the ties between the two countries.

Development Work:

 India has proposed working on development projects in SL. There are also proposals for a joint India-Japan project of the East Container Terminal at Colombo.

Line of credit:

 SL has discussed extending the $400-million Line of Credit from India, calling for India’s enhanced assistance for nationwide housing in SL.

Improved connectivity:

 The air connectivity to Sri Lanka’s north and east from India has witnessed improvement in the recent past, with the already operational direct flight between India and SL and the proposed flight to Batticaloa.

Security ties:

 Post-2019’s Easter Sunday bombings in SL, India and SL have enhanced intelligence sharing and joint training between the security agencies. India has also extended a special $50-million Line of Credit post the Easter Sunday bombings in SL.

 There have been high-level talks with respect to strengthening military ties between the two countries.

 There have also been discussions regarding the setting up of a joint maritime research coordination center.

 India, Sri Lanka, and the Maldives are expected to revive they're trilateral on security, including joint maritime security talks and anti-terror cooperation.

Economic ties:

 India is Sri Lanka’s largest trading partner and also one of the largest investors in the country. Sri Lanka is India’s second-largest trading partner in SAARC.

 India is the largest contributor to the number of tourists visiting Sri Lanka. This is significant given the fact that tourism constitutes a major share of SL’s economy and employment generation.

 Sri Lankans, of all economic strata, across racial and religious divides, come to India for healthcare, education, and pilgrimage.

 India and Sri Lanka signed FTA in 1998, which facilitated increased trade relations between the two countries.

Challenges:

 Though India and Sri Lanka share good bilateral ties, there are certain challenges and threats to this bilateral relation.

Tamil Issue:

 India has a lot of stake in racial harmony in Sri Lanka and has contributed immensely in the past, in terms of resources and human lives to ensure Sri Lanka’s integrity and racial harmony.

 During the recent visit of the SL Prime Minister, India raised the SL Tamil issue and stated that it hopes that the expectations of the Tamil people for equality, justice, peace, and respect would be met by the SL government. It has also called for greater devolution of powers to the provinces according to the 13th Amendment.

 However, the visiting SL Prime Minister declined to comment on India’s stand and gave no commitment on the Tamil issue, adding that though the present administration was in favour of the 13th Amendment, they would not accept any solution that would not be unacceptable to the majority [Sinhala] community.

 Notably, the Chinese have repeatedly backed SL in the Tamil issue, calling it Sri Lanka’s internal matters. This is meant to strengthen China-SL ties and draw a wedge between India and SL.

The China factor:

 Chinese presence has only grown in SL over the last few years, as Beijing has adopted a more assertive policy towards the Indian Ocean region.

 Relations between Rajapaksa and the Indian leaders were seriously strained after Colombo allowed a Chinese nuclear submarine and a warship to be docked at the Colombo port in total disregard for India’s concerns.

 In the end years of Mahinda’s presidency, China invested heavily in Sri Lanka, which included major projects like the opening of the Hambantota Port and the expansion of the Colombo port.

 Sri Lanka is part of China’s Belt and Road Initiative, under which it has received an estimated $8 billion as loans, out of a total of around $11 billion of Chinese investment in the country.

Indian investment in Sri Lanka:

 The present SL administration has ruled out taking forward the MoU signed by the previous government, allowing Indian participation in energy and infrastructure projects in Trincomalee.

 The previously proposed Indian involvement in the Mattala airport project also seems unlikely.

 India’s absence in SL may lead to ceding space to China. In the past when India did not take up an offer to develop Hambantota port in SL, the project ended up with China.

Way forward:

The indispensability of the relation:
 Given the fact that Sri Lanka is India’s closest maritime neighbour and India shares deep historical and cultural ties with SL, the bilateral relationship is indispensable for both the countries.

 Apart from the China factor, Indian interests in Sri Lanka are also driven by other important factors, including post-war reconciliation and respect for the dignity of the Tamil minority in Sri Lanka and its cultivation of ties in its immediate neighborhood and the wider Indian Ocean.

 If India has vital interests for which a partnership with Sri Lanka is critical, Sri Lanka, too, cannot become a pivotal Indian Ocean power without a substantive engagement with India.

 There is a need to consolidate the trust and confidence between the two sides and deepen cooperation in important areas