Opportunity for India to deepen relationship with SL

Contact Counsellor

Opportunity for India to deepen relationship with SL

  • The arrival of refugees from Sri Lanka in Rameswaram last week has only underlined the serious economic crisis playing out in the island nation.
  • Since the three-decade long civil war ended in 2009, this is the first time refugees have arrived on the Tamil Nadu coast.

Present situation in Sri Lanka

  • Those who landed in Rameswaram said they were forced to flee the country because food and work had become scarce in towns and villages.
  • Newspapers have suspended publication due to shortage of newsprint and food inflation has shot up dramatically.
  • Reports point to a bleak scenario with the government forced to deploy security personnel at petrol pumps to manage the fuel ration.
  • Street protests have become a regular feature as people struggle to make ends meet.

Impact on India

  • India could expect an influx of economic refugees if the situation deteriorates.
  • This is the backdrop of Foreign Minister S Jaishankar’s Sri Lanka visit that began on Monday — both countries are expected to sign agreements, including in defence and maritime security.
  • This is a follow up to the $2.4 billion financial aid India has extended over the past few months.

Cause of crisis

  • At the heart of the crisis is Sri Lanka’s mounting debt, which has drained the country of foreign currency, so much so that it can’t even pay for fuel and food grain imports.
  • Tourism, the bedrock of the Sri Lankan economy, was hit badly, first by the Easter bombings in 2019 and then, the Covid pandemic.
  • The war in Ukraine has disrupted supply routes, leading to shortage of essential goods.
  • An ill-timed plan to promote organic farming has fuelled fertiliser shortages and a fall in output.
  • The country had borrowed heavily, particularly from China, to build infrastructure, including a mega port city in Hambantota during the Mahinda Rajapaksa presidency between 2005 and 2015.
  • These capital-intensive projects did not deliver the expected returns, which has left the economy reeling under a mountain of debt: Colombo owes Beijing around $3 billion, for instance.
  • Delhi, more than Beijing, has stepped in now to help Colombo resolve its economic mess.
  • Besides extending a credit line, Delhi has started work on a series of joint projects including the Trincomalee Oil Tank Farms, renewable power projects, and a cultural centre in Jaffna.
  • However, considering the complex history between the two countries, India should tread cautiously in this moment in Sri Lanka.


  • While the two countries share centuries of spiritual, political, economic and cultural ties, Sri Lanka is extremely sensitive about anything that impinges on, or is seen to impinge on, the autonomy of its foreign and domestic policies.
  • It must also be made clear that Delhi’s involvement is for the sake of the Sri Lankan people, not to bail out the ruling Rajapaksa clan.