Sri Lanka, India, and China: Here’s what keeps neighbours friendly – and what doesn’t

Indian Prime Minister Narendra Modi and Prime Minister Mahinda Rajapaksa at Hyderabad House, 

in New Delhi 8 February – PTI

• A look at the changing dynamic of relations

Thewire: The other day on the show Gravitas, it was claimed that China is pushing Sri Lanka to drop India and her other allies.

The examples to substantiate this assertion were: confusion regarding India and Japan’s Eastern Container Terminal (ECT) Project, suspension of the Japan-funded Light Rail Project, and the possibility of abandoning the US-backed Millennium Challenge Corporation Project (MCC). In sum, the telecast insinuated that Sri Lanka was losing longstanding friends and drifting deeper into China’s orbit.

Since India is our neighbour and friend, such commentary gives a negative perception of the relationship between the two countries. Relations have a changing dynamic. They must be evaluated in the context of changing world order and as a comparative exercise.

A comparative analysis will need to holistically explore relations, not only between India and Sri Lanka, but also those between India and other countries, Sri Lanka, and other countries and amongst third party countries.

India: ‘The Big Brother’

Historically, the two countries boast of great mutual relations. At independence and the following few years, Ceylon was economically prosperous, stable, and had no security or political conflicts with any nation. Ties with India were excellent.

Nevertheless, Avatar Singh Bhasin stated that the Joint Planning Staff of the Chiefs Committee of the British government had assessed that a threat to Ceylon’s territorial integrity from India was plausible, although a full-scale attack was only likely if the littoral state was overrun by, or had thrown in her lot with a hostile power. The source indicated that the danger of India interfering with Ceylon’s internal politics was a probability.

Having read Asoka Raina’s ‘Inside RAW – The Story of India’s Secret Service’ which cited the role of India’s intelligence agency in Bangladesh, promoting the Mukti Bahini, training guerrillas and the youth on sabotage, clandestine transmission, and hit-and-run guerrilla tactics, I cautioned the then Prime Minister R. Premadasa, forewarning that Sri Lanka could be subjected to this unfriendly behaviour one day.

And it happened. It was not a friendly neighbour’s best behaviour.

Let us face facts: When Sri Lanka’s territorial integrity was challenged, India was arming and training terrorists, dropping food supplies as humanitarian assistance, and violating international air-space norms. In Choices: Inside the Making of India’s Foreign Policy, Shivashankar Menon said:

“India’s external intelligence agency The Research and Analysis Wing (RAW) was therefore tasked from the 1970s on to keep an eye on the LTTE and other groups. (PLOTE, EROS, TELO, EPRLF, TELA, and so on.) Most accounts say that RAW also trained and supported these groups between August 1983 and May 1987. The logic was that contact and control over them would be useful to further the peaceful evolution of a solution to the Tamil problem in Sri Lanka.”

Rita Manchanda has quoted Rohan Gunaratna as having said that foreign secretary M.K. Rasgotra said that the Sri Lankan operation was “to give a message to J.R. Jayewardene” due to the influx of refugees. It was supposedly to neither subvert Sri Lanka nor divide the island. Menon’s reading was different. If refugees were the issue, India would act similarly with Bangladesh given that millions of refugees from there have crossed borders to enter India.

Secretary Rasgotra had reacted to this reference as “sheerest nonsense.”  With due respect to the amiable secretary Rasgotra, I would like to state that the consequences of such training, arming – irrespective of mixed intentions – were not “sheerest nonsense.” They destabilised Sri Lanka. Therefore, any relation-building approach must take the past into consideration, as the past was likely to repeat.

Though not publicly discussed, Indian involvement in domestic political issues was also allegedly there. The best example was the Indian high commissioner J.N. Dixit. He was not the only one. Later, President Mahinda Rajapaksa stated that he had lost the 2015 presidential elections due to interference by Indians and others. Indians were displeased with President Rajapaksa for several reasons. Anyway, if his allegations were true, the question arises over whether India suffers from a ‘big-bossing syndrome,’ 67 years after Sri Lanka’s independence. Similarly, regular visits by Sri Lankan Tamil political leaders to Delhi and Chennai could not have been for chapatis!

The threats are embodied in another quote by Bhasin regarding the British cabinet delegation that attended Colombo’s independence celebrations. They reported that then Ceylonese prime minister regarded a potential Indian problem as dangerous. Therefore, Ceylon signed a military tie-up with the British. It confirmed a fear of India in Ceylonese leadership.

Again, Bhasin said that small states in the region fell in India’s security perimeter and therefore must not follow policies impinging on India’s security concerns:

“They should not seek to invite outside power(s). If anyone of them needed any assistance it should look to India. India’s attitude and relationship with her immediate neighbors depended on their appreciation of India’s regional security concerns; they would serve as buffer states in the event of an extra-regional threat and not proxies of the outside powers…” 

Again, big bossing!

This overbearing nature was evident even at a personal level by no less a person than former Prime Minister Nehru, according to B.N. Pandey who, referring to Bandung Conference, in Nehru wrote:

‘He received it rather unexpectedly, from the Ceylonese Prime Minister Sir John Kotelawala who interrupted the Bandung chorus of anti-colonialism by launching an attack on another form of colonialism – Russian domination in Central and Eastern Europe. Chou and Nehru were both agitated, but when Nehru asked John Kotelawala, “Why did you do that, Sir John? Why did you not show me your speech before you made it?” The Ceylonese Prime Minister rebuffed him with “Why should I? Do you show me yours before you make it?”’

India and the neighbourhood

In the current context, India has several problems with its neighbours. At these junctures, there is no official demand for neighbours to support India, though the Ministry of External Affairs (MEA) would have been pleased if it had happened. Some “India dependent” countries who received this message reacted suitably.

Historically India has had issues with Pakistan – recently in Pulwama and Balakot. The cancellation of a Bangladeshi dignitary’s visit to India after the passage of the Citizenship Amendment Act (CAA) embarrassed India. The recent skirmishes with China along the Sino-Indian border and China declaring unpreparedness to withdraw challenged Indian security.

The issues with Bhutan on electricity pricing and younger Bhutanese favouring reduced Indian engagement are also unfavourable developments. Nepal has border issues with India in the Kalapani-Limpiyadhura-Lipulekh border. The Nepalese PM recently vowed that Nepal would bring this area back “at any cost”.  Only Sri Lanka, Mauritius and Maldives have no issues to complain of, though the Maldives may be displeased over the treatment of Muslims in India.

Sri Lanka’s relations with India are at a peak. We have no critical issues other than an occasional shout on Kachchativu or Palk Bay fishing or the implementation of the 2017 Memorandum of Understanding (MOU) or finalising the Economic and Technology Cooperation Agreement.

For India, the issues could be political (Tamil Nadu), security (intelligence sharing and ISIS), social (refugees), religious (pilgrims), international (UNHRC or China and Indian Ocean Region (IOR) security), geographic (Palk Bay/Kachchativu). Currently, there are no major barriers for closer relationship building with Sri Lanka for India compared with other neighbours.

However, learning from the Nepalese experience, I may construct a parallel. The Kalapani issue may be a minor one for India, but not for Nepal. But a similar situation may occur between India and Sri Lanka on the Palk Bay, if the two are not cautious with new fishery operational arrangements proposed at the meetings with Prime Minister Mahinda Rajapaksa in February 2020. It is because the international boundary line of Nepal is challenged by India. Can India not challenge the international maritime boundary in Palk Bay? If India challenges us, there is hardly anything we could do, other than to express dissatisfaction. Our experience at the Indian food drop in June 1987 showed how other countries avoided responding negatively against India or issued lukewarm responses.

 There is danger that certain nationalistic acts – relating to the CAA or the NRC – may serve as justifiable precedents to chauvinists for dealing with Muslims in Sri Lanka. These also could be considered negative influences.

Unusual evolution of relationships

Diplomatic engagements between India and Sri Lanka have evolved over decades – going from interventionism between 1983-1989 to distancing with displeasure between 1990-2014 to cordial post-2015. The current era is customised: patching-up with Rajapaksas.

It had been traditional for the newly elected Sri Lankan president or prime minister to visit India first – for ‘offering poojas’, we called it. When India’s external affairs minister, S. Jaishankar met president Gotabaya Rajapaksa immediately after elections and invited him to Delhi, it appeared as India was ‘offering pooja’ this time around. President Gotabaya Rajapaksa visited Delhi, 10 days after the election, and PM Modi, with unusual swiftness, pledged  $ 450 million assistance, probably in an attempt to patch up and checkmate China.

Indian cooperation    

India and Sri Lanka have enjoyed positive economic relations. India is Sri Lanka’s major trading partner and Sri Lanka is a recipient of various grants and loans. During the terrorist conflict, India supported Sri Lanka and at international fora, India has mostly stood alongside Sri Lanka which has reciprocated the same. As between any two countries, there have been disruptions. Thus, before 2015, India had issues with the Mahinda Rajapaksa regime. Now, those issues seem to have subsided.

Regarding recent economic interventions, there appears to be uncertainty on the ECT, though a Memorandum of Cooperation (MOC) between India, Japan, and Sri Lanka exists. However, Sri Lanka may not deviate from the MOC, irrespective of various promises extended to trade unions during an election season, because it reflects negatively on the state’s attitude, will politically frustrate India, and usher in Indian wrath. Still, being considered a regime favourable to China, the prospect of comparative gains could change Sri Lankan stances and render it amenable to outsider influence.

This also applies to other projects (i.e. Liquefied Natural Gas, Trincomalee Petroleum Tanks, etc.) earmarked under the MOU signed in 2017. I am aware that external affairs minister Jaishankar sent an officials’ team to Colombo before the presidential elections to push Colombo. Therefore, the ECT may be a restarting point for the new government.

India has liberalised shipping and ports businesses faster than Sri Lanka. Huge trans-shipment business with India is a cognisant factor. However, newly built Indian ports will be Sri Lanka’s competitors.  These are challenges and motivators to look elsewhere, if not controlled. Hence, cooperation is essential. Therefore, Sri Lanka must develop new strategies and convince domestic troubleshooters of the changes in port management cultures and the political fallout.

Financial assistance responses

A comparison of Indian financial assistance is an important yardstick to evaluate bilateral relationships. In the current budget, finance minister Nirmala Sitharaman has planned to disburse Rs 8,415 crore amongst the neighbourhood countries – Nepal (Rs 1,050 crore), Bhutan (Rs 2,802 crore), Mauritius (Rs 1,100 crore), and the Maldives (Rs 576 crore). But Sri Lanka gets Rs 250 crore. When compared to their respective populations, the disparity is clear. Additionally, India’s contribution to Sri Lanka in the last decade is less than the annual commitment to Bhutan. The discrimination is clear.

Anyhow, pledging $450 million to Sri Lanka heralded a new beginning in relations. However, Bhutan, Maldives and Nepal have received larger financial assistance in comparison, owing to their strategic importance. Similarly, Sri Lanka is also strategically important for India. Otherwise, why would Indians grumble about Chinese footprints at the Hambantota port?

I cite a recent comparative experience of Sri Lanka’s. The Hindu reported that officials of both countries met five months after PM Mahinda Rajapaksa had sought a loan moratorium in Delhi. PM Modi’s decision to pledge $ 450 million within twelve days after Rajapaksa’s election after a five-month delay may be interpreted as a show of hesitancy. In contrast, China signed an agreement with Sri Lanka giving it access to a $ 500-million facility with concessional terms in mid-March, just as a COVID-19 induced financial crisis erupted. No delays were observed.

Sri Lanka-China-India Axis

Neighbouring countries drifting towards China is a worrying sign for India. Sri Lanka is under the microscope on this count. The above-mentioned package compared with Chinese assistance explains the attraction. Adarsha Varma, in the East Asia Strategic Review, noted that Chinese foreign direct investments exceeded 220 billion dollars in 2016, surging 246% from 2015, mostly to BRI countries. He added that Chinese loans to many Indian Ocean Region (IOR) littorals in Asia and Africa far exceed the loans they received from IMF or other developed countries. This cannot be an exaggeration.

Therefore, anyone competing with China should possess huge finances. It is necessary to find India’s financing capacity and hence alternative Indian strategies must be found.

As M.K. Narayanan noted in The Hindu:

“Again, notwithstanding the “Wuhan spirit”, India cannot but be concerned about China’s true intentions, given the regional and global situation and its desire to dominate the Asian region. Within the next decade, China will become a truly formidable military power, second only to the US. The ongoing India-US entente could well provoke a belligerent China to act with greater impunity than previously….”

If the latter happens, Sri Lankan or any Indian neighbour will forcibly have to review its stand.

We may look at realistic examples. If we observe the railway sector expansion (Map I) extending to Europe, parts of Africa, and the maritime sea route as guidance, the spread is humongous. Is it within India’s capacity to compete? If so, well enough. Financial resources matching those of China must be deployed.

Grumbling Chinese assistance to neighbourhood is because the Chinese combine investments with politics. Therefore, more important is to find alternative approaches that could combat both Chinese approaches. It is because China will not stop monetary and political interventions to dominate the global and regional order, as pointed out by M.K. Narayanan.

If India expects greater collaboration, the Chinese, or US or Russian or Japanese approaches should be used. To prove how sudden and difficult it is, I quote Ana Pararajasingham’s article in Asia Times which stated that when Sri Lanka collaborated on the ETC issue with India and Japan, the media divulged that China was gifting a 2,300-ton warship to Sri Lanka and President Xi had offered a fresh grant of $ 295 million. India has also supplied ships to Sri Lanka, but the timing is paramount. It was interpreted as a “clear indication that Beijing is looking to further expand its influence over Colombo”. It was transparent, competitive, and ‘comparative compensation’ for furthering relations. In such a scenario unless with positive action, enticing any neighbouring country is difficult.

This ‘outsider’ relationships must be viewed carefully. The IOR has several international power mismatches. The US, China, Japan, India, etc. have interests in sea lanes. India has shown keenness for the security of the Indian Ocean. Sri Lanka is on the Maritime Sea Route through Hambantota Port which has Chinese involvement becomes an important region for India. Therefore, India-Sri Lanka relationships cannot skip this concern.

With China, these systems, principles, and ideologies change. Decision-making process by the Chinese is very quick, whereas with India or Japan or a western nation it is bureaucratically delayed. This swiftness attracts recipients. This explains why Belt and Road Initiative, or One Belt One Road project have captured the world’s attention. If closer ties are expected, India and Sri Lanka may have to develop competitive systems, principles, and ideologies.



Due to the politicised selection of projects and programmes, the Chinese always try to fill voids or deficits in the benefiting country. It helps the benefiting country’s politicians by investing in what their people require. Thus, the Mahinda Rajapaksa regime has gained from Chinese assistance in infrastructure.

In the sly, this can lead to corrupt practices; also, because most infrastructure projects are huge. Even the World Bank that said the OBOR initiative has spread over to every continent. Even the countries in the Indian initiative BIMSTEC are supported by OBOR and BRI, except in India and Bhutan. Even Bhutan has been approached by China; however, they do not actively engage with the Chinese due to their treaty with India. Even without any such treaty with us, the Indians question Chinese interventions.

Let me compare Indian assistance to Bhutan with that to Sri Lanka. India had been very lavish in assisting Bhutan ($ 800 million for the five-year plan of Bhutan). Bhutan is the largest recipient of Indian foreign assistance. Its population is 800,000 while that of Sri Lanka is 21 million. However, India gains from electricity purchases from Bhutan and Indian military presence in Bhutan, etc. which are not offered by Sri Lanka to India. While many Bhutanese are thankful to India for its assistance, many, particularly the youth, want Bhutan to chart its course. Analyst Gopilal Acharie thinks that, with maturity, Bhutan should step out of India’s shadow and that India also should not think of Bhutan as a ‘vassal state’.

Even in Sri Lanka, some consider our status also in a somewhat similar tone. I quote Anura Kumara Dissanayaka, leader of the Janatha Vimukthi Peramuna, who said that the US and India acted together to replace the incumbent government to enable them to get their plans executed (e.g. the US’s MCC project and India’s Sampur power project, Mattala Airport Project), in which the Sirisena-Wickremesinghe government miserably failed to satisfy them. Less is spoken here of Chinese intrusions.

Saheli Chattaraj’s explanation of Chinese five factors of connectivity (i.e. policy coordination, facilities connectivity, unimpeded trade, financial integration, and people-to-people bonds) and the three commonalities (i.e. common interest, common destiny, and common responsibility) seem to have worked in the neighbourhood.

Since India is a ‘continent’ for us, we should positively look up to India as a huge marketplace, a country from where Sri Lanka can also boost investment. However, there are domestic compulsions to freely operate due to Indian policies that are relaxed to some extent now. This is where trade arrangements and investor boosting connectivity should be negotiated. It is disheartening that trade arrangements have been lying on tables for long. Relations building will include accelerating the progress of these arrangements.

Cautious Indian diplomacy

India can be rough and cautious in maintaining relationships and its responses depend on differing situations. Voting at the UNHRC to oppose President Mahinda Rajapaksa in 2012, India had displayed its reaction to Sri Lanka for not heeding to the global approaches supported by it. Domestic compulsions by the Dravida Munnetra Kazagam also forced India’s hands at this instance proving outsider influencing.

This attitude has been repeated elsewhere too. Currently, Bhutan is faced with challenges regarding unemployment and foreign debt to India. As the Bhutanese government seeks to shift from dependence on hydropower for economic growth, Chinese investment has caught the attention of both young people and the private sector as one with the potential to offer a better future. The Chinese had been trying to entice Bhutan for such development projects and even to start diplomatic ties, which Bhutan has avoided. But after the Doklam standoff, the Chinese dropped tourist arrivals warning Bhutan about the country’s vulnerability in Chinese hands. Hence, pricking small nations seems to be a habit of big nations and could be a lesson for Sri Lanka, especially to have some reserve breathing space.

Nevertheless, India is cautious in dealing with Sri Lankan politics. In October 2018, when Mahinda Rajapaksa was appointed prime minister, the MEA spokesperson Raveesh Kumar said:

“India is closely following the recent political developments in Sri Lanka. As a democracy and a close friendly neighbor, we hope that democratic values and the constitutional process will be respected.”

Indian feeling was legally right. But it would have been anathema to Mahinda Rajapaksa. India respected the rule of law, when the rule of law was deliberately negated, as later proved by the Supreme Court. Please note that this was weeks after Mahinda Rajapaksa had visited Delhi and been received by Prime Minister Modi in the presence of eminent personalities like Subramaniam Swamy.

Pakistan and the Chinese reacted differently. The Pakistani high commissioner in Colombo, Shahid Ahmad Hashmat called on Mahinda Rajapaksa and congratulated him on his appointment as the prime minister. The Chinese ambassador to Sri Lanka Cheng Xueyuan visited PM Mahinda Rajapaksa to present a congratulatory message from the Chinese premier Li Keqiang.  The levels of attachment differed. One must ask Mahinda Rajapaksa with whom he will go. Sometimes cautious diplomacy may not pay dividends.

Contrarily, in November 2019, Indians rushed to Colombo swiftly, before Pakistan and China. The reasoning may be the frustration India experienced and to be the first to stand with Gotabaya Rajapaksa. In November 2019 and mid-February 2020 when PM Modi met with both the Rajapaksas – the president and the prime minister of Sri Lanka – the atmosphere had changed proving that there are no permanent friends or foes in international diplomacy, but only permanent national interests. India could only be expecting reciprocation from Sri Lanka.

Of course, platforming them at openings could help. For example, a video (on the show Gravitas, titled ‘China links to Lankan Buddhists’) introduced another Chinese approach (people-people bonds) to cultivate the Sri Lankan Buddhist establishment. India must face this in Sri Lanka. It should be easy due to historical status and considering that the President’s brother Basil Rajapaksa has a vision for his party to develop like the Chinese Communist Party (CCP) or India’s Bharatiya Janata Party. Since the Modi-Rajapaksas commonalities match, it has been a matter of grabbing opportunity before the Chinese do. If the Rajapaksas prioritise the CCP, India will lose. Writing for The Quint, P.C. Dheeraj discussed similar opportunities on how India could offset China in Sri Lanka through Buddhist ties.

The attempt here had been to look with an open mind about how our relations have been and the challenges ahead. It was seen that inter-country relationships rest on complex platforms. The references to other country experiences prove that there are outside influences that affect relations, sometimes indirectly. Therefore, reminiscing about past relations may be unfit at times in diplomacy.

Hence, countries should dissect these complexities, create environments, and affect changes to relationship strategies. This is because we cannot survive as loners and cooperation becomes key for development, understanding, and diplomacy. It is time for both governments to address their strategies positively.

However, Sri Lanka may be reminded that Indians neutralise opposition, within and outside, through reason, rent, pressure, and intrigue, (the ancient saam, daam, dand and bhed), as quoted mildly, and she will not hesitate to use these strategies if we are on the wrong path.

(Austin Fernando is the former Sri Lankan High Commissioner to India.)