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A notable aspect here for long-time policy analysts is the shift in Indian diplomacy, starting with the Prime Minister himself, who displayed humility with his hosts and extended thanks with obvious sincerity for what was, in fact, a great visit. It seems the ‘neighbourhood first’ policy is finally yielding positive results. Prime Minister Narendra Modi’s visit to Sri Lanka is the culmination of patient and pragmatic policymaking in Delhi, as well as the emergence of a young Sri Lankan President, who, like the Indian Prime Minister, is not burdened with the weight of a political family.
If this visit proceeds as planned, it will benefit Delhi, but it could be even more advantageous for Colombo. A hand held out in time The Joint Statement was notably rich in content, addressing even the irritants lightly. But let’s first consider the context.
This visit must be seen against the backdrop of India’s strong support for Sri Lanka during its financial crisis in 2022, providing $4 billion in foreign exchange support, which was more than what the International Monetary Fund offered and constituted at least one per cent of India’s own forex reserves. Additionally, there was a $400 million currency swap, measures to finance the Lines of Credit, and crucial oil provisions. This extraordinary series of actions, as noted by Foreign Minister Jaishankar, aimed to erase the bitterness of the disastrous military intervention once and for all.
In essence, India emerged as a friend in need, delivering without the usual fanfare. During this visit, India also acted as a constructive co-chair of the Official Creditors Committee, alongside Japan and France, and 17 other countries that have lent a combined $5.8 billion.
Delhi has also converted around $100 million into grants and reduced interest rates. In contrast, despite a visit by Chinese Foreign Minister Wang Yi during the crisis, no significant assistance came from China. Chinese loan interests for Hambantota in 2011 were 6.
5 per cent, contributing to Sri Lanka’s massive debt. Recently, the Chinese ambassador claimed that Beijing had incurred losses of $7 billion due to debt restructuring, stating the country did not boast about its assistance. Understandably, there are no significant grants to highlight, apart from minor ones like providing school uniforms and some houses.
It’s all about the power A second crisis that significantly contributed to the ‘Aragalaya’ protests was a severe power crisis. Therefore, the energy segment of Indian assistance is far more critical than the defence segment, which most analysts focus on. A commitment was made to President Dissanayake in 2024, bringing to the forefront the development of Trincomalee as an energy hub with the UAE, the inauguration of a solar power project with the Ceylon Electricity Board, and the examination of wind energy in the Palk Straits contingent on environmental safety.
All these initiatives are vital in reaching Sri Lanka’s target of 70 per cent renewable energy by 2030, which will help reduce the energy import bill that has been steadily rising in 2024, draining scarce foreign exchange. This also replaces Chinese plans for hybrid energy projects in Jaffna, near the Indian coast, with an earlier $11 million grant replacing heavy Chinese loans. That’s the icing on the cake.
Security trumps defence A third issue is security, steered by the National Security Advisor’s “Colombo Security Conclave," which last met in August 2024. It has since expanded to include Maldives, Bangladesh, Mauritius, and Seychelles as observers. The value on the ground has been palpable.
Navies have cooperated to interdict narcotics shipments, with an Indian navy ship seizing 2,500 kg of narcotics in the Indian Ocean on April 1. Days later, the Sri Lankan navy seized around 800 kg of heroin and other substances. These joint operations, based on intelligence sharing, address a formidable threat to both countries, emanating from Pakistani networks, including one led by Haji Salim Baloch, whose reach extends into India and even Sri Lankan jails.
Defence cooperation is somewhat limited by the lack of production in India, but a network of coastal radars for maritime surveillance is useful to all. Regular visits by the Indian navy, including the recent visit by INS Sahyadri, assist in building camaraderie. However, the real potential for defence cooperation lies in encouraging Sri Lankan companies to manufacture spares and parts for our defence industry, integrating them into global supply chains.
In other words, Sri Lankans need to be given a stake in our success. The North East and the Tamil issue The point of all this is that it benefits all Sri Lankans, be they Tamil or Sinhalese. While PM Modi made no reference to the need for constitutional amendments to give Tamils their rights, the announcement of the construction of 10,000 houses for the Tamil community and a package of 2.
4 billion SLR for the development of the eastern provinces is significant. This is not just altruism but also aims to counter creeping Chinese influence in these areas. Interestingly, the Chinese ambassador suggested collaboration in developing the area.
This is not something India should dismiss outright. With new commitments of $3.7 billion in FDI, China is already a formidable player.
As they say, keep your friends close and your enemies closer. The IPKF is acknowledged – finally Meanwhile, the Tamil issue, with its strong political overtones, and the conflicts between fishermen – with the President also identifying the hugely destructive practice of seabed trawling – have all been kept within a ‘cooperative’ framework. That’s great diplomacy.
So, too, was the visit of the PM to the memorial of the Indian Peace Keeping Force, which saw 1,171 personnel killed there, in one of the most disastrous experiments made by Indian policymakers and at variance with our traditional defense practices. There are still lessons to be learned; but it would be great policy also to have a memorial for those braves in Delhi. For unknown reasons, the bureaucracy has put the brakes on this.
Now the Prime Minister has proudly acknowledged their sacrifices. Time to perhaps dust off those files. Overall, this was an extraordinary visit, for which much credit should not only go to South Block but also to the Sri Lankan bureaucracy and its leadership, who had the courage to embrace their big neighbour.
A notable aspect here for long-time policy analysts is the shift in Indian diplomacy, starting with the Prime Minister himself, who displayed humility with his hosts and extended thanks with obvious sincerity for what was, in fact, a great visit. This is not something seen earlier. This humility is also evident with Foreign Secretary Vikram Misri, who avoids the usual superior attitude that has often marked diplomats of an earlier era.
This attitude, coupled with the ability to move quickly on promises and exorcising the usual bureaucratic delays, will make the ‘neighbourhood first’ policy work. That demon has to go, and it will only do so with an iron-handed accountability process. Hope floats across the Palk Straits.
The writer is a Distinguished Fellow at the Institute of Peace and Conflict Studies, New Delhi. She tweets @kartha_tara. Views expressed in the above piece are personal and solely those of the author.
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