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India-Sri Lanka Relations: Strengthening Economic Ties and Strategic Partnership

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Sri Lankan President Anura Kumara Dissanayake emphasized on Monday that his nation’s territory will not be used for activities harmful to India. This statement came after his meeting with Indian Prime Minister Narendra Modi in Delhi.


The two leaders convened a bilateral meeting at Hyderabad House, where President Dissanayake expressed gratitude for India’s support during Sri Lanka’s severe economic crisis two years ago. Prime Minister Modi highlighted India’s assistance, which included lines of credit and grants amounting to approximately USD 4 billion.


Prime Minister Narendra Modi with Sri Lankan President Anura Kumara Dissanayake (PTI photo)


PM Modi shared that their discussions covered “reconciliation and reconstruction” in Sri Lanka, voicing hope that the Sri Lankan government would address the aspirations of the Tamil minority.


President Dissanayake, who arrived in Delhi on Sunday evening, is on a state visit to India from Sunday to Tuesday. PM Modi noted that this marks Dissanayake’s first visit to India following Sri Lanka’s recent presidential and parliamentary elections.


During his visit, President Dissanayake also met Indian President Droupadi Murmu. He is scheduled to attend a business event in Delhi and visit Bodh Gaya.


The two nations signed agreements on avoiding double taxation and on capacity building and training initiatives.


PM Modi stated that the visit has injected fresh momentum into bilateral relations, with a shared commitment to a “futuristic vision” encompassing “investment-led growth” and improved physical, digital, and energy connectivity.


Their discussions included the Sampur solar power project, enhanced railway connectivity within Sri Lanka, ferry and flight services between the two countries, the digital identity project, and collaboration in education. They also reviewed defence agreements, hydrography efforts, and the need for a sustainable resolution to the fishermen's issue, as highlighted by President Dissanayake.


PM Modi underscored the importance of maritime security, cyber security, and counter-terrorism, advocating for continued discussions through the Colombo Security Conclave mechanism. The two leaders also explored the potential of the Ramayana and Buddhist Circuits to boost tourism between their countries.


“The visit of President Dissanayake to India shall further strengthen the multifaceted and mutually beneficial cooperation between the two countries,” the MEA spokesperson had said on Friday.


Dissanayake’s decision to make India his first international destination after assuming office highlights the significance the new Sri Lankan President—who triumphed over traditional political parties long dominated by the elite—places on fostering bilateral ties.


Accompanying him on the visit are Foreign Minister Vijitha Herath and Deputy Minister of Finance Anil Jayantha Fernando. The trip follows an invitation from India’s External Affairs Minister S. Jaishankar, who visited Colombo less than two weeks after Dissanayake’s election victory. Jaishankar was also the first foreign minister to visit Sri Lanka following the formation of the National People’s Power (NPP) government, which Dissanayake has led since September 23.


India’s Role in Supporting Sri Lanka’s Economic Recovery

A major portion of the discussions focused on economic cooperation between the two nations, emphasizing India's assistance to Sri Lanka during its economic crisis. Prime Minister Modi underscored that India extended credit lines and grants totaling around USD 4 billion, serving as a vital lifeline for Sri Lanka during its severe financial difficulties. Modi noted, “India will continue to stand with Sri Lanka, ensuring its recovery and helping to stabilize its economy. Our commitment to Sri Lanka’s progress is unwavering, and we are looking towards a future of economic cooperation.”


Collaborative Statement

The joint statement issued following the meeting highlighted India’s sustained commitment to Sri Lanka’s economic recovery, with both leaders agreeing to explore new opportunities to bolster bilateral trade and investment. "The ongoing cooperation will focus on growth driven by investment and improving physical, digital, and energy connectivity between the two nations," the statement emphasized.


The leaders also deliberated on expanding the India-Sri Lanka Free Trade Agreement (ISFTA) and recognized the significant potential to boost trade and investment, especially in sectors like agriculture, dairy, and textiles. President Dissanayake emphasized the significance of the Indian market for Sri Lankan exports, stating, “Sri Lanka is keen to expand its trade ties with India, and we are excited about the opportunities that lie ahead. India’s vast market offers immense potential for Sri Lankan goods, and we are looking forward to deepening our economic engagement.”


Regional Security and Defence Cooperation

In addition to economic matters, defense cooperation and regional security were important topics of discussion. Both leaders acknowledged the rising security challenges in the Indian Ocean, particularly due to China's expanding presence in the region. Dissanayake reaffirmed Sri Lanka's commitment to ensuring its territory is not used to threaten India's security, stating, “Sri Lanka will not allow its territory to be used for any activity that harms India’s security. We are committed to maintaining peace and stability in the region.”


Prime Minister Modi welcomed the commitment, highlighting that India and Sri Lanka, as natural allies, would continue to collaborate closely in addressing both traditional and emerging security challenges, such as terrorism, piracy, and drug trafficking. The leaders agreed to enhance their defense and maritime security partnership through joint exercises, intelligence sharing, and capacity-building initiatives.


The two sides also explored opportunities to expand their cooperation in maritime surveillance. President Dissanayake expressed gratitude to India for its support in bolstering Sri Lanka’s maritime capabilities, including the provision of Offshore Patrol Vessels and assistance in establishing the Maritime Rescue and Coordination Centre in Sri Lanka. He stated, “India’s assistance in enhancing our maritime security capabilities has been invaluable. The joint efforts of our navies in tackling narcotics trafficking in the region are a testament to our strong defence collaboration.”


Strategic and Economic Partnership

The joint statement issued following the meeting presented a detailed roadmap for deeper cooperation between the two nations. It emphasized the significance of ongoing dialogue and mutual trust in securing a stable and prosperous future for both. The statement also underscored the leaders' commitment to jointly tackling challenges in the Indian Ocean region, such as safeguarding freedom of navigation, combating cyber threats, and addressing climate change.


Furthermore, the statement reaffirmed the focus on strengthening economic ties, particularly in areas like infrastructure development, renewable energy, and digital connectivity. The leaders agreed to establish a Joint Working Group to explore collaborative opportunities in Sri Lanka’s agricultural modernization and to promote sustainable practices in key sectors like dairy farming, an area in which both countries had already begun cooperating.


Sustainable Solutions for Fishermen's Challenges

A persistent challenge in India-Sri Lanka relations has been the dispute over fishermen crossing maritime boundaries. Both leaders recognized the sensitivities of the issue and committed to finding a "lasting" and "sustainable solution." During their talks, they agreed to begin discussions focused on the welfare of fishermen from both nations, aiming to safeguard the livelihoods of the impacted communities.


“We are committed to finding a lasting solution to the issue of fishermen,” President Dissanayake said. “This is an issue that affects both of our countries, and we are determined to find an approach that benefits all parties involved.”


Strengthening People-to-People Connections and Cultural Collaboration

President Dissanayake shared his excitement about showcasing Sri Lanka's vibrant cultural heritage in India, while Prime Minister Modi emphasized the potential of the Ramayana and Buddhist Circuits as effective means for promoting tourism and cultural diplomacy. “The Ramayana Circuit and the Buddhist Circuit offer immense opportunities to enhance cultural ties and increase tourism between our countries,” Modi stated.


The two countries also agreed to deepen educational cooperation, especially in research and technology, and to establish additional student exchange programs aimed at strengthening the bonds between the younger generations of both nations.


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