India-Sri Lanka Relations: Navigating Partnership, Power, and Geopolitics in 2025

India-Sri Lanka Relations: Navigating Waters of Partnership, Power, and Geopolitics 

🌐 Introduction

From the sacred relic of the Buddha’s tooth in Kandy to joint defense pacts in the Indian Ocean, India and Sri Lanka’s story is more than just diplomacy—a journey of shared histories, modern challenges, and strategic aspirations. In the heart of the Indian Ocean, where global powers jostle for influence, these two neighbors continue to rewrite their narrative of cooperation and competition.

This blog presents a comprehensive, UPSC-relevant breakdown of the India—Sri Lanka relationship, with the latest updates and real-world examples. It is an essential read for civil services and competitive exam aspirants.

🔗 Historical and Cultural Ties

  • India and Sri Lanka have a shared history dating back to the Mauryan Empire and Buddhist exchanges. For example, Emperor Ashoka sent his son Mahinda to Sri Lanka to spread Buddhism, which profoundly influenced the island’s culture.

  • Cultural bonds are reinforced through religion, language, and diaspora. Tamil communities exist on both sides of the Palk Strait, fostering people-to-people connections.

  • India played a key role in supporting Sri Lanka post-civil war, such as rebuilding the Northern Railway Line and constructing 50,000 houses for internally displaced persons (IDPs).

⚡ Recent Developments (2023–2025)

1. High-Level Visits and Diplomacy

  • In April 2025, PM Narendra Modi visited Colombo, becoming the first head of state to meet President Anura Kumara Dissanayake, elected in late 2024.

  • Example: Both leaders emphasized maritime cooperation during the visit and signed energy and defense collaboration agreements.

2. Trincomalee Energy Hub Project

  • India, Sri Lanka, and the UAE agreed to jointly develop an energy hub in Trincomalee, a strategic port city.

  • This includes a multiproduct oil pipeline and solar projects via NTPC and the Ceylon Electricity Board.

  • Example: India’s involvement in the oil tank farm in Trincomalee symbolizes not just economic cooperation, but also strategic presence in the Indian Ocean.

3. Defense Cooperation Agreement

  • Includes joint training exercises, defense technology support, and maritime security collaboration.

  • Example: India gifted a Dornier aircraft to Sri Lanka in 2022 and continues to train Sri Lankan naval officers.

4. Digital Connectivity: UPI-LankaPay Integration

  • India’s UPI is now integrated with LankaPay, allowing real-time digital transactions across borders.

  • Example: Indian tourists can now pay at Sri Lankan shops using UPI apps like PhonePe or Paytm.

5. Maritime and Physical Connectivity

  • In October 2023, a passenger ferry between Nagapattinam (Tamil Nadu) and Kankesanthurai (Jaffna) resumed.

  • Example: This ferry service boosts tourism and trade, especially for Sri Lankan Tamils who have relatives in Tamil Nadu.

6. Financial Support and Economic Ties

  • India provided over $4 billion in aid and credit lines during Sri Lanka’s 2022 economic crisis.

  • Bilateral trade in 2023–24 was around $5.5 billion.

  • Example: India exported petroleum and pharmaceuticals while importing spices and textiles from Sri Lanka.

🏛️ Strategic Importance

  • Geopolitical location: Sri Lanka is located along crucial sea lanes for global trade, near the Malacca Strait.

  • Example: China’s Belt and Road Initiative (BRI) projects, like the Hambantota Port, raise strategic concerns for India.

  • India promotes Neighbourhood First and SAGAR (Security and Growth for All in the Region) to assert influence through development, not debt.

❌ Challenges in the Relationship

  1. Fishermen Disputes

    • Regular arrests of Indian fishermen by Sri Lankan Navy in the Palk Bay.

    • Example: Tamil Nadu fishermen often stray into Sri Lankan waters while fishing, leading to tensions.

  2. Katchatheevu Island Dispute

    • Recently been debated again in Indian politics.

    • Example: In 1974, India ceded Katchatheevu to Sri Lanka. Fishermen claim they should still have traditional rights to access the island.

  3. Balancing External Pressures

    • Sri Lanka balances its relations with India, China, and the West.

    • Example: While India builds infrastructure in the north, China develops the Colombo Port City in the west.

  4. China’s Expanding Footprint

    • China’s growing economic and strategic investments in Sri Lanka challenge India’s traditional influence.

    • Example: The 99-year lease of Hambantota Port to a Chinese company and the Chinese-funded Colombo Port City have raised concerns about debt-trap diplomacy and military access.

    • India sees this as a potential threat to its maritime security and regional dominance.

🎓 Why It Matters for UPSC and Other Exams

  • GS Paper 2: Covers neighborhood policy, international relations, and diplomacy.

  • GS Paper 3: Questions on energy cooperation and maritime security can be linked to India-Sri Lanka ties.

  • Essay/Interview: Useful examples for regional diplomacy, balancing China, and soft power.

  • Example: In an interview, you may be asked, "How should India manage its neighborhood to secure its interests in the Indian Ocean?"

📆 Conclusion

India- Sri Lanka relations in 2025 are progressing on a path of strategic partnership and mutual growth. Despite challenges like the fishermen issue, Katchatheevu, and China’s influence, both countries are showing political will to deepen ties in defense, digital infrastructure, and energy.

For aspirants preparing for civil services and other competitive exams, this evolving bilateral story is a textbook example of diplomacy in action and a crucial case study under India's foreign policy framework.


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