September 2, 2020

Stay Calm: India and Sri Lanka Ties are still Intact

By Don McLain Gill

In July, Sri Lankan President Gotabaya Rajapaksa announced that his government was reviewing a multi-million-dollar port deal Sri Lanka had with India during the Sirisena government. Moreover, Rajapaksa constituted a committee that comprised of five senior officials to review the agreement Sri Lanka inked with India and Japan in 2019 for the development of the deep-sea container terminal. This move came after the workers of the Colombo Port staged a commotion and threatened to go on an indefinite strike if the government allowed any foreign country to develop the Eastern Container Terminal (ECT).

Upon this turn of events, several political pundits have begun predicting the demise of India-Sri Lankan relations. This was coupled with remarks that China has over-taken India as a key partner of Colombo. However, despite these assumptions, it should have been established that India is, was, and will always be a crucial partner of Sri Lanka in the security and economic domains. This holds true regardless of China’s attempt to increase its strategic footprints in South Asia at the expense of India.

“India First”: A Security Perspective

In August, Sri Lankan Foreign Secretary Jayanath Colombage stated that the country will adopt an “India first approach” as its new foreign policy pillar. This reflects that Colombo is willing to protect New Delhi’s strategic security interests in the region. However, it was stated that Colombo remains open to dealing with other key states for economic reasons.

“Very categorically, the president has stated that we have a strategic security-wise ‘India first’ policy because we cannot be, we should not be, we can’t afford to be a strategic security threat for India, period,” said the foreign secretary in an interview for Derana 24 news channel that aired on August 20. “We can’t be and we don’t have to be [a security threat to India]. They are a very big power, [the] fastest developing major economy in 2018, 1.34 billion people, a 7,500-km coastline, it’s a huge country. We need to benefit from India,” he added.

Back on Track: An Economic Perspective

In terms of India’s investments, it must be noted that the notorious Hambantota Port project was first offered to neighbour India as it needed urgent funding to transform the harbour. However, New Delhi showed little interest in funding a massive port construction project in the underdeveloped fishing village. This decision led the way for China to monopolize the project for its own strategic gains.

Going back to the memorandum of cooperation signed between the Sirisena government, India and Japan to develop the terminal, Colombage assured that “The President has said that he is ready to honour the agreement. As per the new guidance of the President, no national asset is given with total control to any country.”

In terms of trade, India is a top import-export partner of Sri Lanka while China is merely a top import origin. This goes to show that there is more weight behind India’s economic position vis-à-vis China. Therefore, China’s geo-economic involvement in Colombo should not be overstated and exaggerated.

Moreover, the United States’ sanctioning of Chinese companies involved in building artificial islands in the South China Sea may significantly alter the fate of China’s Belt and Road Initiative projects, particularly in Sri Lanka. This may cause Colombo to become more cautious with its future engagements with China.

India has cemented its place as an Indian Ocean power. Prime Minister Modi has also shown his willingness to prioritize connectivity projects in South Asia amid China’s growing presence in the region. However, it must continue to accommodate its partners and neighbours if it wishes to maintain its position in the region.

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