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3.7] India Sri Lanka Relations

India Sri Lanka Relations PSIR

1. Introduction to India Sri Lanka Relations

“It is natural for India to stand by Sri Lanka during its difficult time as ‘blood is thicker than water.’”

S Jaishankar

India is Sri Lanka’s closest neighbor. The relationship between the two countries is more than 2,500 years old and both sides have built upon a legacy of intellectual, cultural, religious and linguistic intercourse.

Relations between the two countries have also matured and diversified with the passage of time, encompassing all areas of contemporary relevance.

2. History of India Sri Lanka Relations

2.1 1947-1987

On attaining freedom in 1948, Sri Lanka was constituted as a unitary state. According to the 1956 Official Language Policy, only Sinhalese was adopted as the official language. There was also a discrimination against Tamils in public employment, higher education etc. In 1958, the first major riots between Sinhalese and Tamils flared up in Colombo as a direct result of the government’s language policy.

In 1960s, Sri Lanka started saying that India should take back its 8 lack Tamils which were brought by Britishers as tea plantation workers. PM Nehru was reluctant to do so since it will set a bad precedent, and many other countries with similar history may also make similar demands.

During the Bangladesh War of Liberation, 1971, Sri Lanka sided with Pakistan, allowing its military planes to refuel at Sri Lankan bases.

The LTTE (Liberation of Tamil Tigers Elam) was subsequently founded in 1976 as a reaction to the Sri Lankan policy that prescribed Buddhism as the primary religion of the country, and Sinhala language its national language.

In 1978, Sri Lanka adopted a new constitution, which included substantial concessions to Tamil sensitivities. While Sinhala remained the official language and the language of administration, Tamil was given a new “national language” status.

The Tamil Tigers were still not happy with the progress, and escalated their terrorist attacks.

The riots broke out in 1983 between two ethnic factions and around 2.5 lack Tamils came to India as refugees. 

India tried to facilitated talks between Sri Lankan government, Tamil Parties and Tamil militants. But Tamils (especially militant faction) were bent upon demand for an independent country (Tamil Elam). To wipe out LTTE, now designated as terrorists, Sri Lankan army was moved to Northern part of the country.

In 1987, faced with growing anger amongst its own Tamils, and a flood of refugees, India intervened directly in the conflict. It imposed an economic blockade on Sri Lanka and supplied food and medicines to the Tamil militants by air and sea.

After subsequent negotiations, India and Sri Lanka entered into an agreement, better known as 13th amendment. Under agreement,

  1. Sri Lanka, upholding territorial integrity, will adopt a federal structure.
  2. India would not shelter Tamil insurgents
  3. Sri Lank would not allow the naval presence of third parties at its bases
  4. India would send peacekeeping force (IPKF) to enforce the disarmament and to watch over the Tamil regional councils, while Sri Lankan military will go back to barracks.
  5. LTTE would give up arms.
  6. IPKF (Indian Peace Keeping Forces) would stay till accord is fully implemented.

To implement this India Sri Lanka agreement, Sri Lanka was supposed to bring 13th Amendment to its constitution. However, neither the Sri Lankan government nor Sri Lankan Tamils were happy with the agreement. While the Sinhalese saw the agreement as violation of the country’s sovereignty, LTTE was still not ready to give up the arms, and later even demanded that Indian state of Tamil Nadu should also be included in Tamil Elam.

2.2 1987 – 1991

Under leadership of Rajiv Gandhi, IPKF were sent to Sri Lanka. With Sri Lankan army back in barracks, LTTE launched their attacks on IPKF. At times, Sri Lankan government, who were already not happy with presence of IPKF, supported the LTTE with arms. In a fiasco that ensued, more than 1100 Indian soldiers were killed. Further, it was also alleged that IPKF made human rights violations killing civilians in Sri Lanka.

The whole episode was a huge blunder for Indian foreign policy. Indian soldiers were fighting the battle on Sri Lankan soils, against Indians who were fighting for their rights.

With change of government in India, and increasing demand from Sri Lanka to remove IPKF, VP Singh withdrew Indian forces in 1990. Sri Lanka then took strong action against Tamils. Provincial government was dissolved and Sri Lankan army moved in the region.

In 1991, LTTE carried out assassination of Rajiv Gandhi. The organization lost all the sympathy from India. The Govt. of India declared LTTE as a ‘terrorist organization’ in 1992 and even the Tamil sentiments in India went against the militants.

2.3 1991 – Present

As the LTTE activities increased, Sri Lankan army moved in more firmly in the region. With advances of Sri Lankan military, the leader of LTTE, Prabhakaran committed suicide in 2009. His entire family (including an infant) was assassinated by the Sri Lankan army.

Militancy has come to an end by use of force. Political solution is yet to be fully implemented. Sri Lankan army is still occupying 30% of North Eastern land. India is providing assistance for rehabilitation in the region. Situation is still fragile and resentment among Sri Lankan Tamils persists. It is not clear how long the present peace will continue.

Since then, India Sri Lanka issues are centered around

  1. Human Rights violation by Sri Lanka (treatment of war criminals)
  2. Implementation of 13th Amendment by Sri Lanka, and more recently
  3. Sri Lankan closeness with the Chinese.

3. India Sri Lanka Areas of Cooperation and Conflict

3.1 Indo Sri Lanka Trade Relations

India and Sri Lanka, both are member nations of several regional and multilateral organizations such as SAARC and BIMSTEC. Between the countries, a bilateral free trade agreement was signed and came into effect in 2000. Since then, Indo-Sri Lanka trade has increased to USD 6.1 billion in FY 22-23, with trade largely in favour of India.

In addition to being Sri Lanka’s largest trade partner, India is also one of the largest contributors to Foreign Direct Investment in Sri Lanka. According to the Central bank of Sri Lanka, the total FDI from India so far exceeds US$ 2.2 billion. The main investments from India continued to be in the areas of petroleum retail, tourism & hotels, manufacturing, real estate, telecommunications, and banking & financial services.

3.2 Indo-Sri Lanka Developmental Cooperation

Sri Lanka is one of India’s major development partners over the years. With grants alone amounting to around USD 570 million, the overall commitment by GOI is to the tune of more than USD 3.5 billion. The grant projects cut across sectors such as education, health, livelihood, housing, industrial development etc.

Apart from grants, India has also extended Line of credit for several Sri Lankan projects. Important sectors under these LOCs include: Railway, transport, connectivity, defence, solar etc.

3.3 India Sri Lanka Cultural and People to People Relations

India and Sri Lanka have a shared legacy of historical, cultural, religious, spiritual and linguistic ties that is millennials old. In contemporary times, the Cultural Cooperation Agreement signed by the Government of India and the Government of Sri Lanka on 29 November, 1977 at New Delhi forms the basis for periodic Cultural Exchange Programmes between the two countries.

Buddhism is one of the strongest pillars connecting the two nations and civilizations from the Mauryan times when the Great Indian Emperor Ashoka sent his children to spread the teachings of Lord Buddha to the island nation.

Underlining the shared Buddhist heritage between India and Sri Lanka, the venerated relics of Lord Buddha from Kapilvastu, discovered in 1970 in India have been exhibited two times in Sri Lanka. The first time was in 1978 and later in 2012, drawing crowds of millions of people. Apart from these, India have also extended grant assistance for protection and promotion of Buddhist ties between India and Sri Lanka. This could be utilised for construction/renovation of Buddhist monasteries, education of young monks, cultural exchanges, archaeological cooperation etc.

3.4 India Sri Lanka Tourism Cooperation

Tourism also forms an important link between India and Sri Lanka. Government of India formally launched the e-Tourist Visa (eTV) scheme for Sri Lankan tourists on 14 April 2015. Subsequently, in a goodwill gesture, the visa fee for eTV was sharply reduced. In 2019 Sri Lanka included India in the free visa on arrival scheme and commenced the scheme on 1 August 2019.

India has been the largest source market of tourists visiting Sri Lanka. About 20-30% of Sri Lankan tourists are from India. Sri Lankan tourists too are among the top ten sources for the Indian tourism market.

3.5 India Sri Lanka Human Resource Development Cooperation

India now offers around 700 scholarship slots annually to Sri Lankan students. In addition, under the Indian Technical and Economic Cooperation (ITEC) Program, India offers 400 fully-funded slots every year to officials in various Ministries of Government of Sri Lanka and also to other eligible citizens for short term training programs.

Indian institutes under ‘Study in India’ Program provide technical expertise across a diverse range of courses, and include programs in niche disciplines such as Ayurveda, Yoga, and Buddhist Studies. Under India-Sri Lanka government agreement, Sri Lankan students can also appear for National Eligibility cum Entrance Test (NEET), IIT JEE, GATE entrance examinations and study in Indian under respective courses.

3.6 India Sri Lanka Fishermen Issue

India Sri Lanka Maritime Border 1

Given the proximity of the territorial waters of both countries, especially in the Palk Straits and the Gulf of Mannar, incidents of straying of fishermen, and crossing the maritime boundary are common.

Thus, both countries have agreed on certain practical arrangements to deal with the issue of bona fide fishermen of either side inadvertently crossing the International Maritime Boundary Line. Through these arrangements, it has been possible to deal with the issue of detention of fishermen in a humane manner.

India and Sri Lanka have also agreed to set up a Joint Working Group (JWG) on Fisheries between the Ministry of Agriculture and Farmers Welfare of India and Ministry of Fisheries and Aquatic Resources Development of Sri Lanka as the mechanism to help find a permanent solution to the fishermen issue.

4. India Sri Lanka and the China Factor

In the last decade, China has emerged as the biggest concern for India while dealing with its neighbouring countries. As a part of its ‘string of pearls’ strategy, there are Chinese advances in all of Indian neighbourhood. As suggested by Prof. S D Muni, ‘China has perfected the art of buying elites in smaller countries.’

4.1 Hambantota International Port

Hambantota Port Location Sri Lanka

Opened in 2010, it is Sri Lanka’s second largest port after Colombo. The port was built with $ 1.1 billion LoC by China. Eventually, as the port was seen as economically unviable, and as debt repayment got difficult, Sri Lankan government decided to privatise 80% stake in the port. A Chinese company was chosen through the process and also a 99-year agreement was signed with it for operating the same.

While taking Indian considerations in mind, it has also been explicitly agreed that Chinese naval vessels will not be allowed entry on the port, it remains to be seen if Sri Lanka stands to its commitment in times of crisis.

5. A Note on Sri Lankan Economic Crisis

The Sri Lankan economic crisis is an ongoing crisis in Sri Lanka that started in 2019. Multiple compounding factors like tax cuts, money creation, abrupt and complete ban on chemical fertilizers (to promote organic farming), reduction in tourists due to COVID-19 pandemic etc. led to the twin deficit problem for Sri Lankan economy. It led to unsustainable fiscal deficit, and also current deficit, depleting all of country’s forex reserves.

The crisis led to unprecedented levels of inflation, near-depletion of forex reserves and shortages of medical supplies. In April 2022, the Sri Lankan government announced that it was defaulting on various international loans. This was first such instance of sovereign default in Sri Lankan history since its independence.

The subsequent economic hardships resulted in the 2022 Sri Lankan protests. Sri Lanka received a lifeline in the form of an Indian line of credit amounting to $4 billion. This substantial credit infusion served to cover the costs of importing essential goods and fuel. As a result, the foreign currency reserves of debt-ridden Sri Lanka experienced a notable improvement, reaching $4.4 billion in Dec 2023.

The situation is much better that what it was few months ago, and Sri Lanka is expecting gradual economic growth and recovery.

6. Scholarly Perspective on India Sri Lanka Relations

According to Gopalswami Parthsarathy, India should remain engaged with Sri Lanka and must be cautious of China and Pakistan, especially in naval arena.  Pakistan has offered J-17 aircraft to Sri Lanka and China is involved in Hambantota and Colombo port projects.

AAGC (Asia Africa Growth Corridor) is important and we shall look to finance sustainable infrastructure in Sri Lanka. BIMSTEC can be used to engage with Sri Lanka since SAARC has become redundant.

Hardeep Puri suggests that Indian neighbours have habit of playing China card. India should realize that silent democracy has not worked till now and should take more such active steps. India must engage with Sri Lanka and not be deterred when it plays China card.

Posted in PSIR NOTES

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