The visit has underscored mutual trust between the two neighbours
In the midst of a gradual recovery from the economic crisis, President of Sri Lanka, Anura Kumara Dissanayake, embarked on his inaugural overseas visit to India following his assumption of office in September 2024.

This visit was undertaken at the invitation of the Indian Prime Minister. Sri Lanka, being one of India’s closest neighbours, holds a unique position in New Delhi’s ‘Neighbourhood-First’ policy, given its 2,500-year-old civilisational ties, strategic location, and role as a significant participant in India’s regional and sub-regional initiatives.

Sri Lanka’s preference for choosing India first for the presidential visit after having a new government in place in Colombo, underscores the mutual trust, friendship, and strategic interdependence.

Earlier this year, External Affairs Minister Dr S. Jaishankar and National Security Adviser Ajit Doval visited Sri Lanka to participate in the Indian Ocean Rim Association (IORA) and the Colombo Security Conclave, respectively.

Notably, the External Affairs Minister’s visit marked the first diplomatic engagement by a foreign dignitary following President Dissanayake’s assumption of office in September this year.

Significance of the visit
The visit was crucial for recalibrating the relationship under the new administration in Colombo. The Janatha Vimukthi Peramuna (People’s Liberation Front, also known as JVP) party has taken the top executive position in the country for the first time, and ideologically, the party adheres to Communist principles.

Historically and ideologically, the JVP has been critical of India’s stance toward Sri Lanka. Therefore, the visit provided an opportunity to address issues of mutual interest and extend support to one another in the light of the emerging regional and global challenges.

Another significant aspect of the visit was to discuss the economic and development issues of Sri Lanka with India, a crucial development partner and primary responder, concerning the ongoing financial crisis recovery programs.

From India’s perspective, the meeting was essential for understanding the policies of the JVP and its alliance partner regarding minority issues and exploring ways to address India’s sensitivities in the region.

The visit also aimed to expand this robust partnership and take its frontiers even further.

India-Sri Lanka relations
The volume of bilateral interactions since the establishment of diplomatic relations between India and Sri Lanka highlights the deep mutual dependence and enduring friendship between the two nations.

Sri Lanka stands as India’s closest maritime neighbour and an essential part of India’s Vision SAGAR. Whether in times of disaster, during the COVID-19 pandemic, or amidst the economic crisis in Sri Lanka in 2022, India has consistently been the first to respond.

Economically, India stands as Sri Lanka’s largest trading partner. The bilateral trade between the two countries reached $5.5 billion in 2023-24. India is also among the top investors, with a cumulative investment of $ 2.2 billion as of 2023. Moreover, India plays a significant role as a development partner, providing overall assistance totaling $5 billion in concessional loans and $ 600 million in grants.

In addition, both countries share robust defence and cultural ties. Defence collaboration with Sri Lanka includes training programs, joint exercises, provision of military equipment, high-level bilateral visits, and goodwill visits by Navy and Coast Guard vessels.

Visit takeaways
The visit was highly successful and yielded positive outcomes in various aspects. A new framework titled ‘Fostering Partnerships for a Shared Future’ was established to enhance the comprehensive bilateral partnership.

As a steadfast partner of Sri Lanka, Prime Minister Modi reaffirmed India’s unwavering commitment to assist Sri Lanka in its efforts for economic stabilisation, recovery, and growth.

He further assured President Dissanayake that India’s strategy would prioritise investment and grants aimed at alleviating Sri Lanka’s debt burden and fostering long-term, sustainable economic opportunities that will ultimately enhance the overall size of the Sri Lankan economy.

India has announced an extension of $20.66 million in grant assistance to help settle payments related to seven completed line-of-credit projects in Sri Lanka. These projects were carried out under a loan agreement.

Given the challenging economic circumstances in Sri Lanka, India has chosen to convert the repayments owed under this line of credit into a grant. Additionally, a line of credit project worth $61.5 million, aimed at the rehabilitation of Kankesanthurai Port in the Northern Province, will also be executed as a grant.

Earlier, India’s support—particularly its significant assistance of nearly $4 billion in various forms of aid during 2022 and 2023—has been instrumental in stabilising the Sri Lankan economy.

India has actively contributed to this financial stabilisation effort through its collaboration with the IMF, which is implementing a program for Sri Lanka following the agreed debt restructuring. As co-chair of the Official Creditors Committee, India continues to play a vital role in supporting Sri Lanka through this challenging period.

To enhance connectivity, India has committed to supporting Sri Lanka on various initiatives related to energy. This includes plans for inter-grid connectivity, the development of a multi-product petroleum pipeline between the two nations, the supply of LNG, and the ongoing Sampur Power Project.

Additionally, efforts in digital connectivity have made significant progress with the introduction of UPI services in Sri Lanka. In accordance with the new framework for fostering partnerships towards a shared future, both leaders committed to enhancing their comprehensive bilateral partnership across various sectors, including Parliamentary Exchanges, Development Cooperation, Debt Restructuring, Energy Collaboration, Trade and Investment Cooperation, Strategic and Defense Engagement, and addressing issues related to fishermen, among others.

In a bid to enhance collaboration on infrastructure development, India announced grant assistance of $14.9 million to implement a signaling system in the Maho-Anuradhapura segment of Sri Lankan railways. 

Both leaders reached a consensus to accelerate the implementation of the India-funded grant project for Sri Lanka’s Unique Digital Identity. This initiative will assist Sri Lanka in establishing its foundational digital ID program and platform, similar to India’s Aadhaar system.

India launched an extensive scholarship program aimed at supporting 100 students from economically disadvantaged backgrounds until they complete their studies, in addition to the current scholarship offerings. Furthermore, a memorandum of understanding (MOU) was signed to provide training for 1,500 Sri Lankan civil service officers over the next five years.

Another memorandum of understanding exchanged was regarding a protocol to amend the Double Taxation Avoidance (DTA) Agreement, aimed at aligning the DTA with international standards for preventing tax treaty abuse.

Conclusion
The entire visit was characterised by exceptional warmth and a welcoming atmosphere. The numerous meetings, the diverse range of topics discussed, and the MoUs established during the visit reflect renewed vigour and energy in the bilateral relationship.

The new framework, titled ‘Fostering Partnerships for a Shared Future,’ could serve as a valuable guide for further enhancing the relationship while ensuring it remains people-centric.

India’s support to Sri Lanka through thick and thin, coupled with Colombo’s effort to address New Delhi’s sensitivities and concerns in the Indian Ocean Region, could serve as a deterrent to negative influences in the area.