India Sri-Lanka Relations

India-Sri Lanka Relations

India is Sri Lanka’s closest neighbour that has ethnic links to its most significant minority. India has a huge influence in the island nation’s political, economic, social and cultural consciousness, and its world view.
India Sri-Lanka Relations

Contentious Issues between India-Sri Lanka

  • Fishermen Issue The fishermen issue continues to be a major irritant in the Indo-Lanka ties.  
  • Devolution of power: India stands for a “united Sri Lanka”, but wants an “early and full implementation of the 13th Amendment” that provides for devolution in the Tamil majority Northern and Eastern provinces.
  • Reconciliation process  and war crimes.The UNHRC resolution on war crimes is another important issue on which both the countries have to reach an understanding.
  • India has advocated for speedy rehabilitation and resettlement of the Internally Displaced Persons (IDP). 
Pro-china tilt
  • Sri Lanka is part of China’s Maritime Silk Road. China is also modernizing Hambantota port in Sri Lanka.
  • China also attaches centrality to Sri Lanka to amplify its Maritime Silk Road.
  • Sri Lanka has decided to clear the stalled $1.4 billion Colombo Port City, which had China as a partner. China and Sri Lanka have decided to redefine the Colombo Port City project by making it an international financial outpost in the Indian Ocean 

Fishermen Issue

The historic waters between India and Sri Lanka have become a battleground between the Tamil fishermen on both sides.
  • Sri Lanka accuses Indian fishermen of straying into its territorial waters, while the latter maintain they are only fishing in their traditional areas, especially around Katchatheevu, an islet ceded to Colombo in 1974.
  • The issue of Tamil Nadu fishermen allegedly poaching in Sri Lanka’s territorial waters has been an ongoing conflict, with Sri Lanka’s northern fishermen repeatedly raising concerns over their falling catch and the serious environmental damage caused by trawlers originating from India.
  • Both countries are separated by the International Maritime Boundary Line (IMBL). Often, fishermen from both sides cross over to the other side for bottom trawling fishing expeditions and that results in arrests and, on many occasions, shootings.

Katchatheevu Island

  • One of the major reasons complicating the issue is of Katchatheevu Island. India ceded the uninhabited island to its southern neighbour in 1974 under a conditional accord.
  • In 2009, the Sri Lankan government declared Katchatheevu Island as sacred land owing to a Catholic shrine’s presence on the piece of land.
  1. Way forward to end conflict 
  • Sustainable fishing and alternate livelihood : 
The solution cannot be extra deployment of Navy and Coast Guard. The underlying cause needs to be addressed.
  • There is a glaring need for institutionalisation of fishing in Indian waters by the government of India so that alternative means of livelihood are provided.
  • Government will have to mark up a comprehensive plan to reduce the dependence of Indian fishermen on catch from Palk Bay.
  • Without arriving at a settlement on sustainable exploitation of the marine resources that would end the use of bottom trawlers from Tamil Nadu, India and Sri Lanka will not be able to ensure incident-free fishing in the strait.
  • Indian fishermen, who invoke traditional rights to justify their incursions, want a threeyear phase-out period before they end trawling.  
  • But unless they take to deep-sea fishing, and inland alternatives, India’s fishermen will be locked in a conflict with their Sri Lankan counterparts as well as with a hostile Sri Lankan Navy. 
2. Institutional mechanism
  • The two countries agreed on establishing a Joint Working Group (JWG) on fisheries to help resolve the dispute. 
  • A hotline between the Coast Guards of India and Sri Lanka, convening of the JWG once in three months, and meetings of the fisheries ministers every half-year were the components of the mechanism to be put in place. 
3. Indian Navy or Coast Guard should join the Sri Lankan Navy in jointly patrolling the international boundary to prevent trespassing.

Trade and Investment relations

India is Sri Lanka’s largest trading partner globally, while Sri Lanka is India’s second largest trading partner in the SAARC. Indian exports to Sri Lanka were US$ 4,268 million while Lankan exports to India stood at just US$ 643 million in 2015.
  • The India-Sri Lanka Free Trade Agreement of 1998 was followed by efforts towards a Comprehensive Economic Partnership Agreement (CEPA) to liberalise trade in services and investment starting in the mid-2000s.
  • However, the CEPA negotiations dragged on for nearly a decade in the face of increasing opposition within Sri Lanka, particularly by the business community and certain interest groups such as the medical lobby. 
  • With the new momentum in closer bilateral ties, India is pushing for a new trade pact called the Economic and Technological Cooperation Agreement (ETCA).
  • New Delhi is keen to enter the services sector in Sri Lanka, but there are apprehensions in the country that the strong Indian companies could uproot local businesses.
  • Sri Lanka's opposition has criticised the proposed trade deal with India as an attempt to "foreignise" the country's economy and demanded that the shortcomings in the existing FTA should be sorted out before concluding the deal.

Recent development :

India and Sri Lanka signed a Memorandum of Understanding (MoU) for ‘Cooperation in Economic Projects’, which outlines the agenda for bilateral economic cooperation in the foreseeable future.
The “areas of scope and cooperation” incorporate the mutual agreement both Colombo and New Delhi have reached on the different projects. They are:
  • India to assist Sri Lanka in the enhanced usage of Natural Gas: To set up a Liquefied Natural Gas (LNG) fired 500 Megawatts capacity LNG Power Plant as well as LNG Terminal/Floating Storage Regasification Unit (FSRU) in Kerawalapitiya.
  • To carry out a Feasibility Study on the proposed Petroleum Refinery Joint Venture by Ceylon Petroleum Corporation and the Indian Oil Corporation referred to above.
  • Infrastructure development:
  • To make joint investments in the development of Port, Petroleum Refinery and other industries in Trincomalee.
  • To set up Industrial Zones/Special Economic Zones in identified locations in Sri Lanka.
  • To develop Dambulla-Trincomalee road as an Expressway through joint investments by India and Sri Lanka. 
  •   To develop railway sector in Sri Lanka including new projects of track upgradation and purchase of rolling stock, and
  • To encourage Indian companies to invest in a Container Terminal in Colombo Port, considering that majority of transhipment in Colombo Port is related to India.  

India-Sri Lanka: Analysis  

India’s Sri Lanka policy has been centred on economic cooperation and security concerns, and far less on political matters.
Enhanced economic and development ties are welcome and crucial for the neighbouring countries, but they should not bypass robust engagement on traditional political concerns in the island nation, where scores of Tamils and Muslims in the north and east are yet to return to normal lives eight years after the civil war ended. 
Way forward to enhance engagement
  • India should explore the potential for generating livelihoods in the war-battered northern economy where agriculture and fisheries, its key drivers, are facing a crisis. Resolving the long-standing Palk Bay conflict between fishermen of both countries is central to this
  • While New Delhi’s anxiety over Chinese presence might be justified, it should avoid using the China lens to view Sri Lanka, respecting the country’s autonomy to engage with any willing partner. The more India treats Sri Lanka as an equal partner, the stronger the relationship is likely to grow.

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