♦ India-Sri Lanka Relations ♦

Relations between India and Sri Lanka are among the oldest and most complex bilateral partnerships in South Asia. The two nations share deep historical, cultural, religious, economic, and strategic connections that span more than two millennia. Their geographical closeness across the Palk Strait has facilitated the movement of people, ideas, religion, trade, and political influence throughout history. These interactions have shaped a relationship that combines civilizational bonds with modern geopolitical interests.

In contemporary times, the relationship continues to evolve through economic cooperation, maritime security partnerships, technological collaboration, and tourism exchanges. India has emerged as a crucial partner in Sri Lanka’s development, while Sri Lanka occupies a strategic position in the Indian Ocean that holds significance for regional stability and global trade routes. At the same time, certain challenges—such as maritime disputes, fishermen issues, and regional geopolitical competition—continue to test the relationship.

Historical Foundations of Bilateral Relations

The relationship between India and Sri Lanka has ancient roots, deeply embedded in shared culture, religion, and political interactions. Historical records indicate continuous contact between the Indian subcontinent and the island nation for more than two millennia. These connections have influenced language, religious traditions, trade networks, and governance systems.

One of the most significant historical events shaping the relationship was the introduction of Buddhism to Sri Lanka in the 3rd century BCE. Mahinda, the son of Emperor Ashoka of the Mauryan Empire, traveled to the island and spread Buddhist teachings. This event transformed Sri Lanka’s religious and cultural landscape, establishing Buddhism as a central element of Sri Lankan identity.

Political and dynastic interactions also shaped historical ties. South Indian kingdoms, particularly the Chola dynasty, exercised significant influence over the island. During the 10th century CE, the Chola Empire ruled Sri Lanka for approximately seventy years, leaving administrative and cultural imprints that influenced the region’s governance and architecture.

The colonial era introduced another shared experience. Both India and Sri Lanka came under British colonial rule, though they were administered separately. After decades of nationalist movements, India gained independence in 1947, followed by Sri Lanka in 1948. This transition marked the beginning of modern diplomatic relations between the two nations.

Another major historical episode occurred during the Sri Lankan civil war between 1983 and 2009. India played a significant diplomatic and military role in attempting to resolve the conflict. The Indo–Sri Lanka Accord of 1987 resulted in the deployment of the Indian Peace Keeping Force (IPKF). Although the mission aimed to stabilize the situation, it ended in 1990 amid significant casualties and political tensions.

Important historical elements include:

• Introduction of Buddhism by Mahinda in the 3rd century BCE

• Cultural exchanges between ancient kingdoms

• Chola dynasty rule over Sri Lanka for about 70 years

• Shared colonial history under British rule

• Independence gained in 1947 and 1948 respectively

• India’s involvement in the Sri Lankan civil war through the Indo–Sri Lanka Accord

Geographical and Strategic Proximity

Geography plays a crucial role in shaping relations between India and Sri Lanka. The two countries are separated by the narrow Palk Strait, which at its closest point measures only about 30 kilometers. This short maritime distance has historically allowed easy movement of traders, pilgrims, fishermen, and cultural influences.

One of the most well-known natural links between the two nations is Adam’s Bridge, also known as Ram Setu. This chain of limestone shoals stretches between Rameswaram in India and Mannar Island in Sri Lanka. The formation has both geographical and mythological significance and symbolizes the physical connection between the two territories.

The proximity of the two countries also required clear maritime boundaries. To avoid disputes over fishing zones and territorial waters, India and Sri Lanka signed agreements in 1974 and 1976 to define the International Maritime Boundary Line. These agreements clarified maritime limits in the Palk Strait, Gulf of Mannar, and Bay of Bengal.

Strategically, the geographic closeness has important implications for maritime security and regional trade routes. Both countries recognize that cooperation is necessary to maintain stability and sustainable use of marine resources.

Key geographical factors include:

• Separation by the narrow Palk Strait

• Distance of roughly 30 kilometers at the narrowest point

• Natural connection through Adam’s Bridge or Ram Setu

• Maritime boundary agreements signed in 1974 and 1976

• Shared responsibility for managing marine ecosystems

Geopolitical Significance in the Indian Ocean

Sri Lanka occupies a highly strategic location in the Indian Ocean, placing it at the center of regional geopolitics. The island lies close to major international shipping routes connecting East Asia, the Middle East, and Europe. As a result, the country has become an important maritime hub for trade and logistics.

A large portion of India’s trans-shipment cargo passes through the Port of Colombo, demonstrating the interdependence of the two economies. This logistical reliance makes Sri Lanka a vital partner for India’s maritime trade.

India’s foreign policy initiatives also emphasize the importance of Sri Lanka. Under the Neighbourhood First policy, India prioritizes strong relations with neighboring countries to promote regional stability and development. Sri Lanka also plays a key role in India’s SAGAR vision, which focuses on security and growth for all countries in the Indian Ocean region.

Another significant factor influencing bilateral relations is the growing presence of China in Sri Lanka. Through the Belt and Road Initiative, China has invested heavily in infrastructure projects such as the Hambantota Port and the Colombo Port City project. The 99-year lease of Hambantota Port to China raised concerns in India about strategic competition in the region.

Major geopolitical considerations include:

• Strategic location near global shipping routes

• Large share of India’s trans-shipment cargo passing through Colombo

• Importance in India’s Neighbourhood First policy

• Role in the SAGAR regional security vision

• Increasing Chinese investment through the Belt and Road Initiative

Technological Cooperation and Digital Integration

In recent years, technological collaboration has become an important pillar of bilateral engagement. India has extended assistance to help Sri Lanka modernize its digital infrastructure and improve governance through technological solutions.

One of the major initiatives involves the development of Sri Lanka’s digital identity system. Inspired by India’s digital public infrastructure, the Sri Lanka Unique Digital Identity project aims to create a secure and efficient identification platform for citizens. The project is supported by an Indian grant of approximately INR 300 crore.

Financial technology integration is another area of cooperation. The launch of the Unified Payments Interface in Sri Lanka in February 2024 allows Indian tourists and businesses to conduct seamless digital payments. This step encourages cross-border economic activity and enhances tourism convenience.

Energy cooperation is also advancing through technological collaboration. Both countries are exploring the possibility of connecting their power grids to improve energy security. Plans for a multi-product petroleum pipeline are also under consideration to strengthen energy supply chains.

Important aspects of technological cooperation include:

• Development of the Sri Lanka Unique Digital Identity system

• Indian financial assistance for digital infrastructure

• Launch of cross-border digital payments through UPI

• Plans for power grid interconnection

• Proposed petroleum pipeline for energy security

Major Disputes and Political Challenges

Despite strong historical and economic ties, certain issues have periodically strained relations between India and Sri Lanka. These challenges often arise from maritime activities, domestic political considerations, and unresolved historical concerns.

The fishermen dispute is one of the most persistent issues. Indian fishermen, particularly from Tamil Nadu, sometimes cross the maritime boundary into Sri Lankan waters while searching for better fishing grounds. This has led to arrests and occasional confrontations with the Sri Lankan Navy.

Another politically sensitive issue is the status of Katchatheevu Island. India ceded the island to Sri Lanka through the 1974 maritime agreement. However, political leaders in Tamil Nadu frequently raise demands for its return, arguing that it affects traditional fishing rights.

The implementation of the 13th Amendment to the Sri Lankan Constitution is also an important diplomatic concern. The amendment was introduced following the Indo–Sri Lanka Accord to provide greater autonomy to Tamil-majority provinces. India continues to advocate for its full implementation, while the issue remains a subject of debate within Sri Lanka’s domestic politics.

Key issues affecting relations include:

• Frequent fishermen disputes in the Palk Strait

• Arrests of fishermen crossing maritime boundaries

• Political controversy over Katchatheevu Island

• Debate regarding the implementation of the 13th Amendment

• Domestic political sensitivities in both countries

Economic and Trade Relations

Economic cooperation forms a vital pillar of bilateral engagement. India is currently Sri Lanka’s largest trading partner, and the two countries maintain strong commercial connections across multiple sectors.

Trade between the two nations has grown steadily over the years. In the financial year 2023–24, total merchandise trade reached approximately USD 5.54 billion. Indian exports accounted for about USD 4.11 billion, while Sri Lankan exports to India reached around USD 1.42 billion.

Trade remained strong in the following year as well. During the first eight months of the financial year 2024–25, bilateral trade amounted to roughly USD 3.67 billion, reflecting continued economic engagement despite global uncertainties.

Investment flows have also increased. India is among the largest sources of foreign direct investment in Sri Lanka, with cumulative investments reaching around USD 2.25 billion by 2023. Indian companies are active in sectors such as energy, hospitality, real estate, and financial services.

Both countries are negotiating the Economic and Technology Cooperation Agreement, which aims to expand the existing free trade agreement to include services and technological cooperation.

Important economic features include:

• India as Sri Lanka’s largest trading partner

• Merchandise trade exceeding USD 5 billion annually

• Strong Indian investment in multiple sectors

• Negotiations for the Economic and Technology Cooperation Agreement

• Expanding trade under the existing free trade framework

Financial Assistance and Debt Restructuring

India has played a crucial role in supporting Sri Lanka during economic crises. When Sri Lanka faced a severe financial crisis in 2022, India emerged as one of the first countries to extend large-scale assistance.

The support package included credit lines for essential imports such as fuel, food, and medicines. India also provided currency swaps and other financial instruments to stabilize Sri Lanka’s economy. The total assistance amounted to nearly USD 4 billion.

India has also been actively involved in Sri Lanka’s debt restructuring process. As a co-chair of the Official Creditors’ Committee, India has supported initiatives aimed at restoring the island’s financial stability. In 2025, India converted more than USD 100 million in loans into grants and reduced interest rates to ease the burden on Sri Lanka.

Additionally, humanitarian assistance continues to play an important role. After Cyclone Ditwah in December 2025, India announced a reconstruction package worth approximately USD 450 million to assist in recovery efforts.

Key aspects of financial support include:

• Emergency assistance during the 2022 economic crisis

• Credit lines for fuel, food, and medicines

• Currency swaps and financial stabilization measures

• Loan conversion into grants for debt relief

• Reconstruction aid after natural disasters

Tourism and Connectivity

Tourism represents another important dimension of bilateral engagement. India has consistently remained the largest source of tourists visiting Sri Lanka. The close geographic proximity and cultural similarities encourage frequent travel between the two countries.

Tourism statistics demonstrate the importance of the Indian market. In 2024, approximately 4.16 lakh Indian tourists visited Sri Lanka, accounting for around 20 percent of the island’s total tourist arrivals. In 2025, the number increased to a record 5.31 lakh visitors.

Efforts are also being made to improve connectivity between the two countries. Ferry services linking coastal cities in India with ports in Sri Lanka have been revived or proposed to facilitate travel and trade. These routes are expected to strengthen people-to-people ties and promote regional tourism.

Digital payment systems such as UPI have further simplified travel by enabling convenient transactions for visitors.

Key tourism developments include:

• India as the largest source of tourists for Sri Lanka

• Over four lakh Indian visitors in 2024

• Record tourist arrivals from India in 2025

• Revival of ferry services between coastal cities

• Digital payment integration for travelers

Security and Strategic Cooperation

Security cooperation between India and Sri Lanka focuses mainly on maritime safety, defense coordination, and regional stability. Given their proximity in the Indian Ocean, both countries recognize the importance of working together to address security challenges.

In April 2025, the two nations signed a major defense agreement emphasizing maritime cooperation. Joint patrols and information sharing are intended to enhance surveillance and protect shipping routes.

Military exercises are regularly conducted to strengthen operational coordination. Naval exercises such as SLINEX and army drills like MITRA SHAKTI help improve interoperability between the armed forces of both countries.

India has also supported Sri Lanka’s maritime capabilities through capacity-building initiatives. These include gifting a Dornier maritime surveillance aircraft and funding the Maritime Rescue Coordination Centre in Colombo, which became operational in 2024.

Key security cooperation features include:

• Defense agreements focusing on maritime cooperation

• Regular military exercises between armed forces

• Joint naval and army training programs

• Capacity building through equipment and training

• Maritime rescue and surveillance initiatives

Development Partnership and Infrastructure Support

India’s development partnership with Sri Lanka represents one of the most significant aspects of bilateral relations. Through grants, infrastructure projects, and social development programs, India has contributed to improving living conditions across the island.

One of the flagship initiatives is the Indian Housing Project. Under this program, India committed to constructing 60,000 houses for displaced and economically disadvantaged families in the Northern and Eastern provinces. By now, approximately 46,000 houses have already been completed.

India’s total grant commitments to Sri Lanka exceed USD 780 million. These funds support projects in housing, education, health care, and infrastructure development.

Regional development remains a key priority. India has pledged around 2.4 billion Sri Lankan Rupees for social and economic development programs in the Eastern Province, focusing on improving livelihoods and community welfare.

Key development initiatives include:

• Construction of thousands of houses under the Indian Housing Project

• Grant assistance exceeding USD 780 million

• Infrastructure and social development programs

• Regional support for the Eastern Province

• Community welfare and livelihood projects

Conclusion

India–Sri Lanka relations represent a unique combination of ancient cultural ties and modern strategic cooperation. Over centuries, the two countries have developed deep connections through religion, trade, political interactions, and shared experiences. These historical bonds continue to influence their diplomatic engagement today.

In the contemporary era, the partnership has expanded into new areas such as technology, digital infrastructure, maritime security, and economic cooperation. India has emerged as a crucial partner in Sri Lanka’s development, particularly during times of economic crisis and natural disasters. Meanwhile, Sri Lanka’s strategic position in the Indian Ocean makes it an essential component of regional stability and trade networks.

However, maintaining strong relations also requires addressing sensitive issues such as fishermen disputes, political concerns regarding minority rights, and geopolitical competition in the region. Diplomatic dialogue and mutual understanding remain essential for resolving these challenges.

Looking ahead, the future of India–Sri Lanka relations will likely depend on expanding economic partnerships, strengthening technological collaboration, and maintaining balanced regional diplomacy. With shared cultural heritage and growing strategic interests, the two nations are well positioned to deepen cooperation and contribute to stability in the Indian Ocean region.