India-Sri Lanka relations under the new Government: What does India want?

The political shift in Sri Lanka following the election of Anura Kumara Dissanayake as president in 2024 has sparked new discussions on the future of India-Sri Lanka relations. As the former head of the left-wing Janatha Vimukthi Peramuna (JVP), Dissanayake's rise to power marks a significant departure from the pro-Western, pro-market policies of his predecessors. His election has raised crucial questions regarding Sri Lanka’s diplomatic orientation, especially in balancing its traditional ties with India and the increasingly prominent role of China in the region. 

India views Sri Lanka as a key partner in its broader regional strategy, particularly within the framework of the Indian Ocean Region (IOR). The island nation’s proximity to India makes it vital for India's maritime security, trade routes, and regional stability. Given the increasing Chinese footprint in Sri Lanka over the past decade, particularly through major infrastructure projects like the Hambantota Port and the Colombo Port City project, India has expressed concern over China's growing influence in the Indian Ocean. India has historically been wary of any external power gaining a foothold too close to its borders, and Sri Lanka's geopolitical positioning makes it a strategic priority.

India has long been one of Sri Lanka's largest trading partners and a significant source of investment, particularly in sectors such as energy, infrastructure, and textiles. Following the Sri Lankan economic crisis in 2022, India has provided substantial financial assistance, including credit lines and humanitarian aid. In this context, India is keen to ensure that Sri Lanka’s economy remains stable, as its neighbor's economic health has direct implications for India’s own interests.

The revival of the Colombo Port Terminal, operated by India’s Adani Group, the ongoing discussions on energy projects like the development of the Sampur coal power plant, and continued investments in infrastructure are seen as crucial components of India’s strategic outreach. For India, ensuring that these projects proceed without disruption is essential for maintaining its influence in Sri Lanka’s economic landscape.

The Sri Lankan government's relationship with China has been growing over the past decade, driven by China’s Belt and Road Initiative (BRI) and its investments in infrastructure projects, including highways, ports, and power plants. Despite the economic benefits that Sri Lanka has gained from Chinese investments, there is growing caution among segments of the Sri Lankan population about the long-term consequences of Chinese debt, especially after Sri Lanka had to lease the Hambantota Port to China for 99 years due to its inability to repay loans.

Under Dissanayake’s leadership, Sri Lanka may attempt to recalibrate its foreign policy, seeking to strike a more balanced approach between India and China. Although Dissanayake's rhetoric during the campaign emphasized a desire for a "neutral" foreign policy, the country’s economic dependence on China and the geopolitical realities of the region make complete neutrality impossible. Dissanayake may opt for a middle ground, continuing to engage China on economic projects while maintaining close ties with India on security, trade, and cultural matters.

Dr. S. Jaishankar's visit to Sri Lanka in October

Dr. S. Jaishankar, India’s External Affairs Minister, made his first official visit to Sri Lanka on October 4, 2024, marking a significant moment in the early days of President Dissanayake's administration.  Dr. S. Jaishankar’s visit was seen as an important gesture from New Delhi, signaling India’s continued engagement with Sri Lanka under its new leadership. Jaishankar, during his trip, emphasized India’s commitment to supporting Sri Lanka’s economic recovery, particularly through lines of credit, development assistance, and energy cooperation. He also reaffirmed India’s security interests, stressing the importance of regional cooperation to ensure maritime security and counterbalance any external threats.

Jaishankar met with key political figures, including Prime Minister Dr. Harini Amarasuriya, Foreign Minister Vijitha Herath, and opposition leader Sajith Premadasa, underscoring India’s desire to maintain strong bilateral ties. The visit was framed as part of India’s “Neighborhood First” policy, which emphasizes the importance of engagement with neighboring countries to ensure regional stability and security.
During the visit, Jaishankar offered several initiatives aimed at supporting Sri Lanka’s development, including a $61.5 million grant to modernize the Kankesanthurai Port and converting $20 million worth of Line of Credit projects into grants. In addition, discussions covered energy cooperation, renewable energy exports, digital infrastructure, health, and dairy development. Jaishankar also reaffirmed India’s support for Sri Lanka’s debt restructuring and its efforts with the International Monetary Fund (IMF).

However, one contentious issue that continues to strain relations is the longstanding dispute over Indian fishermen poaching in Sri Lankan waters. While India frames this as a humanitarian issue affecting the livelihoods of Tamil Nadu’s fishermen, Sri Lanka perceives it as a violation of its sovereignty. Jaishankar urged the Sri Lankan government to release detained Indian fishermen and reconsider fines imposed on them.
The issue of devolution to Tamil-majority regions, another recurring Indian demand, also came up during the discussions. Jaishankar pushed for the full implementation of the 13th Amendment to Sri Lanka’s Constitution, a controversial move that aims to provide greater autonomy to Tamil regions but has faced resistance within Sri Lanka’s political establishment.

During the meeting with Jaishankar, President Dissanayake expressed his appreciation for the financial support India provided during Sri Lanka’s recent economic crisis and stressed the importance of continued collaboration. The meeting also touched on areas of mutual interest, including fisheries and promoting national unity. Mr. Jaishankar, on behalf of Prime Minister Narendra Modi, extended an invitation to Mr. Dissanayake to visit India at a mutually convenient date. Mr. Dissanayake, too, extended an invitation to Mr. Modi to visit Sri Lanka.

President Anura Kumara Dissanayake's visit to Delhi at the invitation of Prime Minister Modi will likely to happen only after November this year.

Adani Wind Power project: From cancellation to reconsideration

Adani Group, one of India’s largest multinational conglomerates with a strong presence in the energy sector, has announced plans to develop a major wind power project in Sri Lanka. The company has proposed two wind projects in the country’s northeast — one in Mannar and another in Pooneryn. In February 2023, Sri Lanka’s Board of Investment approved Adani Green Energy’s $442-million, 450 MW wind power project. However, the Mannar project is currently facing court challenges from environmental groups, who raise concerns about potential threats to wildlife and have questioned the transparency of the project’s award process. The project has also sparked a legal battle over environmental concerns, with a court case ongoing.

Adani Group, led by Indian billionaire Gautam Adani, is also involved in the development of a $700-million container terminal at the Colombo Port, further expanding its footprint in Sri Lanka.

The Attorney General (AG) has informed the Supreme Court that Sri Lanka’s Cabinet of Ministers has decided to reconsider the approval of the wind power project in Wedithalathivu, Mannar, by Adani Green Energy. This announcement follows the filing of Fundamental Rights (FR) petitions seeking to invalidate the Cabinet's approval of the project. Deputy Solicitor General Avanthi Perera, representing the AG, informed the court that the Cabinet would revisit the facts of the matter and make a decision regarding the project’s future on November 7, 2024. The AG further stated that the current interim Cabinet had made this decision, and the final decision would be communicated by the new Cabinet following the upcoming General Election. In the meantime, the government’s stance on the project remains unchanged.

The petitioners, in agreement with the information presented by the Deputy Solicitor General, requested permission to amend their petitions, citing changes in the respondents due to the formation of the new government. The Supreme Court granted permission to amend the petitions and instructed that any government observations related to the project be filed before January 31, 2025. The court also scheduled further hearings on the case for March 18 and 19, 2025.

National People’s Power (NPP) leader Anura Kumara Dissanayake, during his campaign for the September 21 presidential election, vowed to cancel the 450 MW wind power project if elected. Dissanayake criticized the deal, calling it corrupt and detrimental to Sri Lanka’s interests, particularly highlighting the higher electricity rates Sri Lanka is paying to Adani — $0.0826 per unit, compared to a local supplier’s rate of $0.0488 per unit.
However, following the election, Sri Lanka’s new government indicated that it would review the deal with the Adani Group. This move creates a new challenge for the Indian conglomerate as it seeks to expand its business operations abroad. 

Foreign Minister Vijitha Herath explained that the previous administration’s approval of electricity prices for Adani Green Energy’s projects “was a problem.”He said the new government will reevaluate the deal after the parliamentary elections on November 14, 2024.

This decision to reassess the wind power project aligns with campaign pledges made by President Dissanayake, who has called the project a threat to Sri Lanka’s energy sovereignty. The government has indicated that no significant policy decisions will be made on major projects before the parliamentary elections.

Any challenge to the Adani Green deal would significantly impact Gautam Adani’s expansion plans in Sri Lanka. The group is also involved in the development of several infrastructure projects in the country, including a major expansion of the Colombo container terminal, supported by the U.S. Development Finance Corporation.

The Adani Group, despite being one of India's largest conglomerates, has faced a series of challenges in other countries such as in Bangladesh and Kenya. 

In Bangladesh, the Adani Group has faced significant resistance regarding its Rampal coal-fired power plant project, a joint venture with the Bangladesh Power Development Board (BPDB). Adani supplies Bangladesh from its 1600 megawatt coal-fired plant in eastern India. Adani’s power deal with Bangladesh, signed in 2015, was one of the many under Sheikh Hasina, which the current interim government has called opaque. A national committee is now reassessing 11 previous deals, including the one with Adani, which has often been criticised as expensive. Bangladesh is ramping up payments to Adani Power after the Indian conglomerate cut electricity supplies by half, reportedly over an unpaid $800m bill. 

Earlier, Adani Power had sent a letter to the Bangladesh Power Development Board (PDB) requesting payment of outstanding dues by October 30. The letter, dated October 27, warned that failure to clear the bills would lead to a suspension of power supply by October 31 under the Power Purchase Agreement (PPA).

In Kenya, the Adani Group has faced hurdles related to its involvement in the Lamu Port and Lamu coal power project, a major infrastructure initiative aimed at expanding the country's energy capacity. The project, intended to strengthen Kenya’s electricity infrastructure, has faced controversy since its inception. The agreement, signed on Oct. 11 as a 30-year public-private partnership with the Kenya Electricity Transmission Company (KETRACO), aimed to finance and operate several high-voltage transmission lines, including routes like Gilgil-Thika-Malaa-Konza and Rongai-Keringet-Chemosit.

Kenya’s High Court has halted the government’s plans to award a major electricity transmission contract to India’s Adani Energy Solutions Limited, following concerns over the procurement process. On Friday, the court issued an order blocking the Sh95.68 billion ($740 million) deal after a petition by the Law Society of Kenya (LSK) raised concerns about the lack of public participation and adherence to constitutional standards.

Justice Bahati Mwamuye ruled that "a conservatory order be and is hereby issued suspending the implementation of any Project Agreement…any of its related companies and entitles with regard to development of transmission lines, substations, or any other electrical power infrastructure."

$5 Billion Road and Rail link

India and Sri Lanka have long shared strong ties through cultural exchange, trade, and human connections. However, recent years have seen some strains due to China's growing economic influence in Sri Lanka. Despite this, the two nations maintain close proximity—Sri Lanka is only about 30 km from India’s southernmost tip. The maritime boundary between the two countries is divided at three points: the Bay of Bengal to the north, the Palk Strait in the center, and the Gulf of Mannar to the south. The Palk Strait, the narrowest part of the boundary, ranges from 16 km to 45 km in width.

In 2002, the Sri Lankan government proposed a land bridge connecting India and Sri Lanka between Rameswaram in Tamil Nadu, India, and Talaimannar in Sri Lanka. The proposal included road and rail links that could offer significant economic benefits to both nations. Despite initial agreement on the project, opposition from the Tamil Nadu government delayed its development.

Once realized, the land bridge could facilitate greater movement of people and cargo between the two countries, fostering increased trade and economic opportunities. The connection would reduce travel time and costs for goods and services and help enhance the capacity of both the Trincomalee and Colombo ports. A detailed study conducted by Sri Lanka's Bureau of Investigation proposed a six-lane combination of bridges, causeways, and rail tracks, with water depths of no more than seven meters.

The proposed bridge would serve as a direct link between the national highways of southern India and Sri Lanka, enabling smoother cargo and passenger movement between Madurai and Trincomalee, as well as connecting other major cities. It would also open up new opportunities for industries, particularly agro-industries, in both regions.

The discussion about a road-and-rail link connecting India to Sri Lanka’s North-East has gained momentum following reports that talks are in the final stages for a $5 billion project between the two countries.
In an article that appeared on Mint, Sri Lanka's Environment Secretary B. K. Prabath Chandrakeerth was quoted as stating “last month I participated in one meet­ing with India in New Delhi, and we are going to estab­lish the high­way and railway line connectivity between Rameswaram in India and Trincomalee in Sri Lanka”.

 “This is being planned as busi­ness­men in both countries have to pay more and with the road and rail connectivity, both parties can get help because it will help in trade with European and other coun­tries. Indian busi­ness­men can also get some benefits from Sri Lanka as well.”

According to Chandrakeerthi, the road and rail connectivity would help streamline trade with European and other international markets. While the final cost of the project is yet to be determined, he indicated that the estimated cost is around $5 billion, with the Indian government expected to bear the full cost.

However, shortly after the Mint article was published, Chandrakeerthi clarified that his comments had been informal and that he had not been aware they were on the record. The Sri Lankan Transport Ministry also denied any official knowledge of the discussions.

Despite the uncertainty surrounding the project’s details, New Delhi has long been keen to enhance connectivity with Sri Lanka. In recent years, ferry and air services have resumed between the two countries, and the Indian High Commissioner to Sri Lanka, Santhosh Jha, referred to connectivity as the “central pillar” of the emerging partnership. He noted that daily flights between Jaffna and Chennai, along with ferry services between India and Northern Sri Lanka, are steps toward deeper cooperation.

Earlier this year, The Times of India reported that the Indian government is exploring the feasibility of constructing a 23-kilometer bridge connecting Tamil Nadu’s Dhanushkodi to Talaimannar in Sri Lanka. This is part of a broader initiative to improve land access to Sri Lanka’s key ports, including Trincomalee and Colombo, and is aimed at boosting connections with the Tamil-majority North-East of Sri Lanka.

The proposed road-and-rail link, if it materializes, would represent a significant step in the long-term partnership between India and Sri Lanka, providing economic and strategic benefits for both nations.
India has expressed interest in ensuring that these connectivity projects, along with other investments, are not disrupted by potential political changes in Sri Lanka. However, Sri Lanka’s Transport Minister Vijitha Herath said that all ongoing connectivity projects are currently under review to assess their status.

While the project has the potential to enhance connectivity and trade between the two nations, it is fraught with geopolitical, environmental,  and social risks that need careful management for successful implementation.
Geopolitically, the project could heighten tensions with China, given its growing influence in Sri Lanka, and may provoke opposition from Tamil communities in both Sri Lanka and India, complicating diplomatic relations. 
Environmental risks are a major concern, as the construction could disrupt marine ecosystems in the Palk Strait, affecting local fisheries and biodiversity. The financial feasibility of the $5 billion project is uncertain, and delays or cost overruns could undermine its long-term economic benefits. 

Political and legal challenges are also significant, as the project could face opposition from local communities, regulatory hurdles, and legal disputes over land use and environmental impacts.
Fishermen and the Palk Bay dispute

The 64 kilometers of ocean between Tamil Nadu and Sri Lanka, known as the Palk Bay, has long been a source of conflict. The dispute centers around territorial rights, particularly over the island of Kachchatheevu, and the fishing grounds in the region. These tensions have sparked violence and strained bilateral relations, particularly as local fishing communities on both sides of the Palk Bay rely heavily on marine resources for their livelihoods. The political dynamics in both India and Sri Lanka have further exacerbated the situation, with each country struggling to enforce agreements or compromise on key issues.

One of the primary proposals to address the crisis includes stricter regulations to ban destructive bottom trawling, the introduction of permits for fishing on both sides of the maritime boundary, limits on fishing to sustainable levels, and the establishment of a dedicated authority to manage Palk Bay’s maritime concerns. These measures could help reduce both immediate conflicts and long-term environmental damage.

Despite multiple attempts at negotiations and several bilateral agreements, progress has been slow. Enforcement challenges, divided domestic political views, and a lack of compromise on contentious issues have hindered any substantial resolution.

In a recent meeting in Colombo, India’s High Commissioner Santosh Jha and Sri Lankan President Anura Kumara Dissanayake stressed the importance of a long-term resolution that addresses the needs of fishermen on both sides and fosters greater cooperation. Dissanayake reiterated his commitment to safeguarding Sri Lanka's interests. Earlier, when India’s External Affairs Minister S. Jaishankar met with the Sri Lankan President, the issue was also discussed. Both sides appear to be open to talks, with fishermen themselves pushing for dialogue. On October 25, fishermen in Rameswaram demonstrated in favor of such talks, echoing the concerns of Northern Province fisherfolk who had previously called for negotiations, despite grievances over "destructive bottom trawling" by their counterparts in Tamil Nadu.

The issue was also discussed at the 6th meeting of the India-Sri Lanka Joint Working Group (JWG) on Fisheries, held on October 29, 2024, in Colombo. The Indian delegation, led by Dr. Abhilaksh Likhi, Secretary of the Department of Fisheries, included senior officials from various ministries and agencies, underscoring the importance of the issue on both sides.

The delegations undertook a comprehensive review of all relevant issues pertaining to fishermen and the fisheries sector. Both sides agreed that the highest priority should be accorded to address the various issues faced by fishermen in a humanitarian manner as they pertain to livelihood concerns on both sides. They also agreed that only a humane, constructive and cooperative approach can create a durable basis for addressing the issues faced by fishermen on both sides.

The frequent arrests of Tamil Nadu fishermen, particularly from Ramanathapuram, for crossing the International Maritime Boundary Line (IMBL) remain a well-known aspect of the dispute. Many are released after Indian diplomatic intervention. As of October 27, Tamil Nadu Chief Minister M.K. Stalin reported 30 such incidents in 2024, with 140 fishermen and 200 boats currently in Sri Lankan custody. There have been casualties on both sides during operations by Sri Lankan authorities to apprehend Tamil Nadu fishermen, most recently in June and August. 

The Indian side urged the Government of Sri Lanka for earliest release of Indian fishermen and their boats under Sri Lankan custody. Indian side also pointed out increase in detention of Indian fishermen and their boats in Sri Lankan custody, including imposition of long sentences and heavy fines, and stressed the need to uphold established understandings and modalities on issues related to fishermen.

Highlighting the ongoing cooperation between the Indian Naval & Coast Guard authorities and their Sri Lankan counterparts, both sides agreed to continue enhanced cooperation, including on surveillance and patrolling, maintaining regular contacts through their hotline, and all other operational matters. The Indian side drew attention to the recent tragic incidents at sea leading to unfortunate injuries and loss of lives, and strongly reiterated that the use of force should be avoided under all circumstances. Indian side also reiterated its request to schedule the meeting of Fishermen Associations between the two countries at the earliest to further discuss the issues related to fishermen. The two sides agreed to meet regularly and continue to have comprehensive discussions on the issues related to fishermen for finding a mutually acceptable and long lasting solution. 

Fishermen from both sides should revisit the broad framework of understanding reached in 2010, which could serve as a foundation for renewed negotiations. Additionally, the northern fishermen should recognize the need for a reasonable transition period for Tamil Nadu’s fishermen, allowing for adjustments to new practices. A combination of political will, practical solutions, and cooperation from all stakeholders will be essential to resolving the Palk Bay dispute and ensuring the long-term sustainability of the region’s marine resources.

The ongoing conflict over fishing rights in the Palk Bay between India and Sri Lanka has long been a point of tension, exacerbated by issues such as illegal fishing, particularly bottom trawling. Indian fishermen, especially from Tamil Nadu, often cross the IMBL into Sri Lankan waters, where they engage in destructive fishing practices that damage marine ecosystems. Bottom trawling, in particular, is highly unsustainable, as it destroys fish habitats and depletes fish stocks, which harms both the local economy and the environment. 

The Indian government must recognize that this practice is not only environmentally harmful but also unfairly infringes on Sri Lanka’s territorial waters, exacerbating tensions between the two countries.
To address this issue, the two governments must reestablish a communication mechanism that promotes dialogue and cooperation on fisheries management. Both sides need to collaborate on enforcing the IMBL, ensuring that fishermen from both nations respect boundaries. Indian authorities, in particular, need to take a stronger stance on preventing their fishermen from crossing the boundary, especially given the negative impact of illegal fishing practices. 

The idea of deep-sea fishing as an alternative to bottom trawling is not a solution. Instead of alleviating pressure on local fish populations, deep-sea fishing could further plunder marine resources by targeting deep-water fish stocks, which are already vulnerable to overfishing. Thus, deep-sea fishing is not a sustainable alternative, but rather a new form of exploitation of marine ecosystems. India must acknowledge the need for sustainable fishing practices and avoid harmful methods that contribute to the depletion of marine resources.

Ultimately, both governments must prioritize cooperation and sustainability over short-term economic interests. The Indian government has a key role in ensuring that its fishermen adopt eco-friendly practices and that there is mutual respect for maritime boundaries.

President's meeting with Indian High Commissioner

The Indian High Commissioner to Sri Lanka, Santosh Jha, recently met with President Anura Kumara Dissanayake on several occasions to discuss strengthening the longstanding relationship between the two nations. The discussions included a detailed review of Indian-assisted projects in Sri Lanka, highlighting both progress and challenges.

The meetings took place amid concerns regarding ongoing and future Indian projects in Sri Lanka, with India keen to ensure that these initiatives and related investments are not disrupted by potential regime changes in Sri Lanka.
During the meetings, High Commissioner Santosh Jha emphasized the deep-rooted friendship and close geographical ties between India and Sri Lanka. He reaffirmed India's commitment to supporting Sri Lanka’s development and expressed hope for the country’s emergence as a peaceful and stable nation in the region.

Jha also commended President Dissanayake’s anti-corruption efforts, particularly his focus on digitalizing government systems to fight corruption. He reiterated India’s willingness to assist Sri Lanka in implementing digitalization measures, reinforcing the stable and continuous friendship between the two neighboring countries.

The two leaders also discussed the ongoing fishing disputes in the Northern Sea, underscoring the importance of a long-term resolution that takes into account the needs of fishermen from both nations while promoting cooperation. President Dissanayake reaffirmed his commitment to safeguarding the interests of Sri Lanka’s fishing community. Additionally, the President expressed interest in leveraging India’s expertise in power, energy sector development, and digitalization to advance these areas in Sri Lanka with India’s support.

Ultimately, India’s key interest in Sri Lanka is a stable, prosperous, and cooperative neighbor. Given the shared cultural, historical, and economic ties between the two countries, India seeks to maintain close diplomatic and economic relations. 

The future of India-Sri Lanka relations will largely hinge on how President Dissanayake manages the delicate balance between India and China. While India will continue to push for regional stability, economic cooperation, and constitutional reforms in Sri Lanka, the island nation’s internal politics and external economic pressures will play a significant role in shaping its foreign policy in the years ahead. India is likely to remain a crucial partner in Sri Lanka’s recovery, but will also keep a close eye on China’s growing influence in the region.