Introduction
India-Sri Lanka relations have entered a new strategic era. As regional powers strengthen economic, maritime, and cultural ties, the evolving India-Sri Lanka relations reflect a broader shift in South Asian diplomacy. maritime interests, and geopolitical realities. In April 2025, Prime Minister Narendra Modi became the first foreign leader to visit Sri Lanka after President Anura Dissanayake’s National People’s Power (NPP) government came to power. His visit was more than symbolic—it marked a calculated move to deepen bilateral engagement rooted in realpolitik.
From economic aid and energy collaboration to port development and defence cooperation, India-Sri Lanka relations are now being redefined with pragmatism at the core.
What Sparked the Shift in India-Sri Lanka Relations?
India and Sri Lanka have historically shared close civilizational and geographical ties. However, the dramatic realignment of their bilateral relationship began during the 2021 economic crisis in Sri Lanka. India emerged as the largest aid provider to its southern neighbour, committing over $4 billion in support, which included:
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Emergency supplies of food, medicine, and fuel
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Financial assistance through currency swaps and credit lines
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Strategic infrastructure investments, including the revival of Trincomalee oil tank farms
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Development partnerships in logistics, health, and education sectors
This swift and substantial assistance helped stabilize Sri Lanka’s crumbling economy and elevated India’s credibility as a dependable regional partner.
Recent Developments in 2025
In September 2024, Anura Dissanayake assumed office as President of Sri Lanka. Significantly, his first official foreign visit was to India—a move that emphasized Colombo’s diplomatic priority shift.
In April 2025, Modi reciprocated with a landmark visit to Sri Lanka. During his stay, he was awarded the country’s highest civilian honour, and was hailed as a “friend of Sri Lanka” by President Dissanayake.
Key agreements signed during the visit included:
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Cross-border energy grid connectivity, enabling clean energy trade
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A ₹2.37 billion LKR ($8 million) development grant for 33 projects across the Eastern Province
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Loan-to-grant conversions for modernizing Kankesanthurai Port and upgrading the Jaffna railway
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Support for the Sampur Solar Project, a joint Indo-Lanka clean energy venture
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Diplomatic facilitation to involve the UAE in transforming Trincomalee into a regional energy hub
These agreements signalled a shift toward grant-based, people-first development, prioritizing long-term impact over debt-driven funding.
Why India-Sri Lanka Relations Are Evolving
The strengthening of India-Sri Lanka relations is driven by strategic convergence and mutual benefits. For Sri Lanka, India remains a lifeline amid mounting debt and a need for inclusive development. For India, Sri Lanka’s location along major sea lanes gives it outsized importance in maritime security.
India is also keen to counterbalance China’s growing influence, particularly through the Belt and Road Initiative (BRI). While China has funded large infrastructure projects, they have often come with high debt and limited local benefit.
India’s “Neighbourhood First” and “Act East” policies offer Sri Lanka an alternative—development rooted in partnership, respect, and regional stability.
India’s pragmatic approach during this period has included:
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Avoiding public pressure on sensitive domestic issues like Tamil autonomy under the 13th Amendment
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Maintaining silence on the reversal of privatized energy projects, including those involving Indian conglomerates
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Focusing on people-centric development without direct political interference
Sri Lanka, in turn, has reaffirmed that it will not allow any activity on its soil that could harm Indian strategic interests—an implicit reassurance regarding China’s military presence.
What’s Next for the Strategic Partnership?
One of the most significant takeaways from Modi’s visit was the institutionalization of defence cooperation between the two countries.
A new Memorandum of Understanding (MoU) was signed to facilitate long-term collaboration across:
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Joint naval exercises and enhanced port calls
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Defence technology and industrial partnerships
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Maritime surveillance and hydrographic mapping
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Training programs and joint capacity-building efforts
This signals Sri Lanka’s increasing comfort with India’s leadership in regional security architecture. It also reflects a break from previous hesitation in engaging India on defence matters.
Looking Ahead: Balancing Between Powers
India-Sri Lanka relations are growing stronger, but that does not mean Sri Lanka is shifting away from China. In January 2025, President Dissanayake visited Beijing, where he:
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Reaffirmed support for BRI infrastructure projects
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Advanced a Free Trade Agreement
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Secured new agreements in green energy, digital economy, and maritime safety
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Finalized loan restructuring and revived previously paused Chinese-funded projects
China remains Sri Lanka’s largest bilateral creditor and a critical investor. But what’s emerging is strategic hedging—Sri Lanka is leveraging both powers while ensuring autonomy.
India’s challenge lies in maintaining consistent, respectful, and scalable engagement. This includes:
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Expanding clean energy and infrastructure cooperation
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Enhancing connectivity through air, rail, and sea linkages
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Increasing cultural exchanges and educational programs
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Using soft power tools like Ayurveda, Buddhism, and cinema to foster people-to-people bonds
Internal Link: Learn how India’s Act East Policy complements this strategy
Conclusion
India-Sri Lanka relations are entering a new era—one that moves away from emotional legacy and towards strategic alignment. The Modi–Dissanayake rapport is setting the tone for this transformation.
Both nations are embracing pragmatism over posturing, mutual benefit over imbalance, and cooperation over coercion. In the evolving Indo-Pacific framework, their relationship could become a template for regional diplomacy.
As the world navigates multipolarity and shifting alliances, India and Sri Lanka are showing that trust, timing, and tact can achieve far more than treaties alone.