Colombo, February 13: India-Sri Lanka relations are undoubtedly at their best now, thanks to India’s timely and generous assistance to the financially-beleaguered southern neighbor. But in the past 75 years or more, bilateral relations have been troubled more often than not. Therefore, the million-dollar question now is: Will India’s help during the ongoing financial crisis stabilize the relationship and put it on a growth trajectory for a change?
A point to be taken note of is that there has always been an underlying fear in Sri Lanka about “Indian hegemony”. This is because of India’s humongous size, its geopolitical ambitions, and its continuous involvement in the internal affairs of Sri Lanka. Two communities in Sri Lanka, the Indian-origin Tamils and the Sri Lankan Tamils are ethnically, culturally and politically linked to Tamil Nadu. The majority community in Sri Lanka, the Sinhalese, have an atavistic fear of India given the fact that there had been many invasions from the Tamil country in India during the Chola period. The Indian politico-military intervention in 1987 to bolster the Sri Lankan Tamil case for autonomy brought out latent fears.
Fear of Indian hegemony has created distrust, which in turn, has made Sri Lanka cultivate India’s adversaries Pakistan and China, causing deep anxiety in New Delhi. Add to this the widening footprint of geopolitical rival China in Sri Lanka since 2010, and India’s anxieties have only multiplied.
However, during the COVID-19 pandemic and the financial crisis thereafter, India shored up its position and prestige significantly in Sri Lanka by stepping in with assistance vigorously and generously under Prime Minister Modi’s “Neighborhood First” policy. It lived up to its self-assigned role of being the “First Responder” in times of crisis in Sri Lanka. India was the first to provide assistance to the tune of US$ 4.5 billion and tell the IMF that it will give the necessary financial assurances that Sri Lanka needs to get the IMF’s Extended Fund Facility (EFF) of US$ 2.9 billion.
By doing so with alacrity, India stole a march over rival China which only said that it would give a two-year moratorium on repayments due to its EXIM Bank in 2022 and 2023.
However, the IMF’s EFF is still a far cry because China’s financial assurance is inadequate and Sri Lanka has to fulfil the IMF’s tough restructuring and financial reform targets. Meanwhile, India has been continuing to help Sri Lanka in a variety of ways to checkmate China. India has offered much-needed infrastructure projects in the field of energy and pharmaceuticals. It has offered Indian private sector investments and sought a business-friendly environment to go with it. Sri Lanka has been inhospitable to foreign direct investments because foreign capital is seen as an arm of imperialism.
History of Tension
Even as India and Sri Lanka were under British rule, the two parts of the Empire were locked in conflict over the overwhelming presence of Indian workers in the tea and rubber plantations, the mainstay of the island’s economy. Sri Lankan leaders of the day feared the political and economic consequences of the presence of 900,000 to 1 million people of Indian origin in the plantation sector. They kept demanding that the workers’ stay be restricted. But these demands were opposed by the British planters as well as the British Indian government and nationalists in India.
As India and Sri Lanka approached independence after World War II and after independence too, Lankan leaders like D.S.Senanayake feared that India would “invade” the island as part of an alleged bid to become the dominant power in Asia or to protect the Indian-origin Tamils. Senanayake sought and obtained a Defense Agreement with the UK in 1947 ahead of independence in 1948. The post-independence Lankan government promptly disenfranchised and made the nearly one million Indians Stateless. This increased tension with India though the feared “Indian invasion” never took place.
The citizenship issue festered till 1964, when the Sirimavo-Shastri Pact was signed to partly solve the problem. 525,000 Indian Origin Tamils (IOT) were to be repatriated to India and 300,000 absorbed by Sri Lanka. However, by 2003, due to domestic political exigencies, all Indian-origin Tamils were given Sri Lankan citizenship bringing the curtains down on a major irritant in Indo-Lankan relations.
1971, when the Janatha Vimukthi Peramuna (JVP) launched an insurrection, India sent helicopters to help the Sirima Bandaranaike government to quell it. But when India and Pakistan were at war over the independence struggle in East Pakistan, Sirima annoyed India by allowing Pakistani military aircraft to refuel in Colombo. By the mid-1970s, the dispute about sovereignty over Kachchativu island, located midway between India and Sri Lanka, had come up. After very hard negotiations, India gave in to Sri Lanka.
But by 1983, India-Lanka relations had again deteriorated due to the North-Eastern Tamils’ struggle for autonomy/independence. The 1983 anti-Tamil riots, the influx of Tamil refugees into Tamil Nadu, and the rise of the Tamil armed struggle forced India to support the struggle both openly and clandestinely to put pressure on Colombo to negotiate with the Tamils. But India also mediated between the Tamil nationalists and the Lankan government to find a peaceful settlement based on devolution of power to the provinces.
But the India-Sri Lanka Accord of 1987, the deployment of the Indian Peace Keeping Force (IPKF) and the enactment of 13 th. Amendment (13A) of the Sri Lankan constitution in 1989 to devolve some power to the provinces, were highly controversial in Sri Lanka. Till date, the 13A is inadequately implemented and remains an irritant in India-Lanka relations.
With President R. Premadasa giving marching orders to the IPKF and its exit from Sri Lanka in 1990, India-Sri Lanka relations froze. However, the assassination of former Indian Prime Minister Rajiv Gandhi by the Liberation Tigers of Tamil Eelam (LTTE) in 1991 resulted in an Indo-Lankan understanding of sorts. And when Sri Lankan President Mahinda Rajapaksa decided to go all out to finish the LTTE in 2005-2006, India threw its weight behind Rajapaksa and helped him crush the LTTE.
But India’s help came on the condition that Rajapaksa implements the 13A in full after the war. Rajapaksa grandly promised “13A Plus” but reneged. Therefore, when Sri Lanka was upbraided in the UN Human Rights Council for alleged war crimes, India was neutral to the annoyance of Sri Lanka. Opinion in the island began to favor Pakistan and China which unreservedly backed Colombo.
When Rajapaksa came to power for the second time in 2010, he invited China to help Sri Lanka build badly needed infrastructure. China built the Hambantota port and the Mattala airport, reclaimed land for the Colombo Port City, and built a container terminal at Colombo port. However, except for the container terminal at Colombo, the airport, the Hambantota port and the Port City proved to be white elephants, contributing to the debt crisis leading to the government’s defaulting in April 2022. An acute shortage of foreign exchange led to a heavy reduction in imports on which Sri Lankans depended for their daily needs.
China stood by and watched Sri Lanka do down, offering only a further loan and a buyers’ credit. Beijing also demanded the signing of a Free Trade Agreement. But India stepped in with loans and aid worth U$ 4.5 billion. It quickly shipped essentials like fuel, food and medicines. India also gave the financial assurances to Sri Lanka required by the IMF to make Colombo eligible to get the US$ 2.9 billion EFF.
Sri Lankans have some persistent grievances over Indian investments. They complain that Indians are slow executors of projects as compared to the Chinese. Sri Lankans also resent India’s condition that Chinese investments be kept out of the Northern Province which is close to India. Three ABD-funded Chinese energy projects in the islands off Jaffna had to be cancelled due to Indian pressure citing security.
On its part, India has become very sensitive about visits by Chinese “spy” vessels to Lankan ports. India suspects that China wants to encircle India. India insists that Sri Lanka become a part of its defense perimeter in the Indian Ocean and the US-led QUAD also. But Sri Lanka would like to stay away from geopolitical rivalries.
While India is wanting trade and investment agreements to replace loans and grants, Sri Lankans are wary about these agreements fearing flooding by low-priced Indian goods and also an influx of Indian personnel. This is the reason why India’s efforts to sign a Comprehensive Economic Partnership Agreement (CEPA) and the Economic and Technical Cooperation Agreement (ETCA) were stalled. Sri Lankans are still grumbling over the allegedly iniquitous FTA with India signed in 1997, though Lankan exports to India have gone up appreciably thanks to the FTA.
However, due to the on-going economic crisis, the Wickremesinghe government is now talking to India on ETCA. But given past experience, Indian (and also other foreign) investments are likely to run up against opposition from Sri Lankan entrepreneurs, trade unions and nationalists. The backing out of the deal with India and Japan to build the Eastern Container Terminal at Colombo port is an example. Recently, the leader of the opposition, Sajith Premadasa, threw the spanner in the works by saying that his government will not abide by the deals signed by the Wickremesinghe government because it has “no legitimacy.”
While India’s focus vis-à-vis Sri Lanka is increasingly economic and geopolitical in nature, it has not lost interest in local Lankan political issues like devolution of power to the Tamil-speaking North and East through the full implementation of the 13A. To keep India pleased, President Wickrmesinghe is talking to the Tamil parties on this long-standing problem. But he has already run into opposition from the JVP and the Buddhist clergy putting his plan in jeopardy.