In Sri Lankan crisis, a window of economic opportunity

News: Recently, in an interview with an Indian TV channel, the Sri Lankan Prime Minister, Ranil Wickremesinghe, talked about significant aspect of India-Sri Lanka relations

Proposal for forging closer ties between Sri Lanka and the southern parts of India – the sub-regional integration

There are various commonalities between Sri Lanka and the southern parts of India.

The south India-Sri Lanka sub-region can be developed as a single market. It would provide more opportunities for the economic growth of both countries.

In addition, in 2016, the Sri-Lankan PM had also proposed the tri-nation economic convergence, encompassing Singapore too.

What are the reasons behind present bonhomie in the India-Sri Lanka relations?

The present economic crisis in Sri Lanka has pushed it closer to India for immediate relief.

For the last few months, the Indian media’s regular coverage of the crisis has led to better understanding and even created a sense of empathy in India about the plight of the neighbouring country.

India, as part of its ‘Neighbourhood First’ policy, has extended $3.5 billion aid to Sri Lanka to help secure food, health and energy.

The Government of Sri Lanka and the Export-Import Bank of India have signed an agreement for a $55-million short term Line of Credit.

India’s Finance Minister has urged the International Monetary Fund (IMF) to provide urgent assistance to Sri Lanka.

On its part, Tamil Nadu decided to provide aid in the form of rice, life-saving drugs and milk powder.

What is India’ foreign policy challenges?

Some sections of the Sinhalese believe that “India has been a threat to them. It can be a threat to them in future too”. For example, South Indian rulers had invaded Sri Lanka during ancient times. In the late 20^th century, the Indian government supported Tamil rebels.

Despite India’s open willingness to take part in the development of Sri Lanka after the civil war, the scale of its involvement has been modest.

The Sri Lankan government, in the past, had unilaterally scrapped a tripartite agreement signed with India and Japan for the development of Colombo’s East Container Terminal.

Another project, a collaboration between NTPC Limited and the Ceylon Electricity Board, was cancelled.

Further, the Sri Lanka government has not shown much political will in other projects such as the development of the Kankesanthurai harbour and the expansion of the Palaly airport in Jaffna.

The project of building a sea bridge and tunnel, connecting Rameshwaram to Talaimannar, remains on paper despite India’s readiness for it.

Several popular brands of south Indian restaurants and retail textile establishments have not opened their branches in Sri Lanka, despite their presence outside India or overseas.

Way Forward

The Sri Lanka Crisis provides an opportunity to bring Indian and Sri Lankan societies closer. It is a prerequisite to achieving an economic union between Sri Lanka and the southern States of India.

India has received the projects for development of the West Container Terminal, the Trincomalee oil tank farm and a couple of renewable projects.

Recently, the Sri Lankan Cabinet cleared two connectivity proposals: flights from Jaffna to Tiruchi, Tamil Nadu, and a ferry service from Kankesanthurai to Karaikal in Puducherry.

There is enormous scope for collaboration between the two countries in the area of infrastructure development.

– For example, the Sri Lanka’s electricity grid can be linked with India’s Grid. India already has cross-border energy trade with Bangladesh, Nepal, Bhutan and Myanmar.

India’s interests would also be served by developing the east coast of Sri Lanka, especially the Trincomalee-Batticaloa belt, whose potential for tourism, commerce, trade and industry is well known.

The regular movement of people and goods should be allowed again on the traditional sea routes of Thoothukudi-Colombo and Rameshwaram-Talaimannar.

The Indian side should dispel the apprehension among Sinhalese about India being a threat. It can be done by facilitating greater people-to-people interaction like pilgrimages to Buddhist Sites.

Source: The post is based on an article “In Sri Lankan crisis, a window of economic opportunity” published in the “The Hindu” on 16^th June 2022.