India-Sri Lanka Relations

India- Sri Lanka Relations

India-Sri Lanka Relations

This article deals with ‘India-Sri Lanka Relations.’ This is part of our series on ‘International Relations’ which is an important pillar of the GS-2 syllabus. For more articles, you can click here.

Brief History

  • The earliest mention of Sri Lanka dates back to the time of the Ramayana. Ravana, the king of Lanka, who held Sita captive in Lanka, was rescued by Ram with the help of Hanuman.
  • The native people of Sri Lanka (then Ceylon) were colonially under the British. In 1815, the population composition of Sri Lanka was 3 million Sinhalese Buddhists and 300,000 Tamil Hindus. 
  • From the 1830s onwards, the British started transporting indentured labour from India, especially from Tamil Nadu, to Ceylon to work on tea plantations. The Tamils who the British transported settled in the northern part of Ceylon.  

Areas of Cooperation 

1 . Geopolitical Importance

  • Sri Lanka’s location in the Indian Ocean region is strategically and geopolitically important not for India only but other powers as well. Sri Lanka has several highly strategic ports located among the busiest sea lanes of communication. 
  • Nowadays, Indo-pacific is emerging as the centre of interest for almost all the major powers. Hence the importance of Sri Lanka is increasing rapidly. 

2. Defence Cooperation

  • India has trained many Sri Lankan officials at the National Defence Academy and India Military Academy.
  • India and Sri-Lankan navy and coast guards constantly undertake intelligence sharing.
  • India and Sri Lankan armies conduct joint military exercises such as MITRA, SHAKTI, IN-SLN etc.

3. Tamil Factor

  • The Tamil factor has historically dominated the India-Sri Lanka relations.
  • Both countries can cooperate to solve the Tamil problem and implement the 13th Constitutional Amendment in letter and spirit. 

4. Trade & investment

  • India and Sri Lanka have already signed Free Trade Agreement (FTA) in 1998 & CEPA is on the cards. 
  • India has the  2nd largest FDI in Sri Lanka.  
  • India and Sri Lanka have signed a Currency Swap Agreement of $1 billion. 
  • India exports petrochemicals, pharmaceuticals, two-wheelers and vegetables while imports rubber products, spices and electric wires. 
  • Indian firms operational in Sri Lanka include Tata, Jet Airways, Ashoka Leyland, Ceat, Apollo etc.
  • Indian Oil Corporation (IOC) plans to establish a six million ton per annum refinery in Sri Lanka. 

Issue regarding CEPA

  • India envisages services based cooperation in CEPA. However, Sri Lanka has had expressed some reservations. It hopes for more economic and technical cooperation than the increased movement of Indian professionals in Sri Lanka.
  • Sri Lanka fears that Indian firms may ultimately dominate the Lankan economic space and might eventually lead to the loss of jobs for the Sri Lankan native population.

5. Cultural

  • Buddhism is followed by the majority of Sinhalese. It was spread due to the efforts of Ashoka.
  • India is building  
    • Ramayana trail in Sri Lanka and
    • Buddhist circuit in India (Sinhalese are Buddhist). 
  • Rabindranath Tagore had influenced Sri Lankan national anthem – “Sri Lanka Matha” (we salute mother, Sri Lanka). 

6. Developmental Cooperation

  • Sri Lanka is one of the primary recipients of Indian development aid. For example, $167.4 million lines of credit to develop and upgrade the tsunami-damaged Colombo-Matara rail link.
  • India has built 43,000 houses for resettlement and rehabilitation of Tamils in Northern and Eastern Provinces with a grant of $ 350 million.

7. Multilateral Cooperation

Both are members of

  1. SAARC
  3. South Asian Economic Union

Present issues faced by Sri-Lanka

Economic hardships

  • Sri Lanka is facing a balance of payment crisis due to various reasons, such as 
    1. Debt trap diplomacy of China
    2. Fall of tourism in the aftermath of the Covid-19 pandemic and Easter bomb blasts of 2019.
    3. Agriculture crisis due to overnight transition to organic farming.
    4. Increase in oil prices due to the Russia-Ukraine war.
  • Indian government helped Sri Lanka by providing credit lines, currency swaps and financial assistance. 

Security concerns

  • Sri Lanka witnessed the deadly terror attack (Easter attacks) in April 2019, killing more than 250 people.  

Majority sentiment

  • The Rajapaksas enjoy a robust political base among the majority population, the Sinhalese, for defeating the LTTE in 2009.
  • Riots against minority Muslim groups are also rising due to increasing Islamophobia in Sri-Lankan society. Such riots are led by Sinhala majoritarian groups such as the Bodu Bala Sena.

Issues between India and Sri-Lanka

Issue 1: Tamil Issue

India – Sri Lanka relations have generally been cordial, barring some tensions caused due to ethnic conflict between people of Indian origin – mainly Tamils- living in Sri Lanka & Sinhalese (ethnic majority constituting 70% of Sri-Lankan population). 

Ethnic Composition of Sri-Lanka

  • Sinhalese is the predominant community. They consist of 3/4th of the Sri Lankan population. They speak Sinhalese and follow Buddhism.
  • Tamils in Sri Lanka are predominantly Hindus. 
  • The Muslims, mainly of Tamil origin, speak both Tamil and Sinhala.
Composition of Sri Lankan Population
Composition of Sri Lankan Population

There are two types of Tamils in Sri Lanka

Ceylonese Tamils Tamils whose forefathers had gone to Sri Lanka centuries ago.
– Their population is estimated to be 2.5 million.
They are concentrated in Jaffna and the northern & eastern coast.
Indian Tamils Tamils whose forefathers were taken by Britishers as plantation workers.
– Their population is estimated to be ~ 1 million.
They are concentrated in the districts of Colombo, Kandy & Trincomalee in traditional tea garden areas.
Tamil Areas in Sri Lanka

Reason for Sinhalese Anti-Tamil feeling

  • The reason for this is colonial. Tamils were in the minority, but Britishers favoured Tamils over Sinhalese in all opportunities. Tamils were preferentially appointed to bureaucratic positions, which angered the Sinhalese majority.
  • When Britishers went back
    • Sinhalese majority started to capture all property and posts from Tamils.
    • The Tamil language lost the status of official language under the provisions of the Sinhalese Only Act.
    • Ceylon Citizenship Act was passed, making it virtually impossible for Indian Tamils to obtain citizenship. Over 700,000 Tamils (consisting of up to 11% of the country’s total population) were made stateless overnight. 
    • After that, the state back pogrom of Tamils started in which Tamils were massacred & their property was looted.
    • In retaliation, Tamils started a civil war under the leadership of LTTE headed by Prabhakaran.

Side Topic – Sri Lanka vs LTTE: Timeline of Events

Post-1948 Sri Lanka got independence in 1948.
Sri Lanka was suspicious of India and aligned itself with the US in the 1970s and 1980s. 
Sri Lanka was continuously persecuting the Tamils and refused to grant citizenship to Tamils. 
Pre- 1976 Scholars and theorists allege that India used the Research & Analysis Wing (R&AW) to train Tamil rebels in Sri Lanka. The aim was to use Tamil insurgents to destabilize the anti-India regime while also ensuring that the Tamil rebels did not succeed in creating a separate state. 
The R&AW supported the Tamil Eelam Liberation Organization (TELO). But as the R&AW had gradually succeeded in destabilizing the Sri Lankan government, it slowly stopped supporting the rebels.
1976 Liberation of Tamil Tigers Eelam (LTTE), a separatist and insurgent militant force, was formed by V Prabhakaran. 
LTTE also began to seek support from Tamil political leaders in Tamil Nadu.
1976 – 2009 – Civil War continued.
Large scale violence and human rights violations were observed.
2009 The Lankan army killed Prabhakaran. 
LTTE-Sri Lanka Civil war ends.  More than 1 lakh died in the civil war 

To deal with the situation, various agreements were signed like

India- Sri Lanka Issue
  • Nehru – Kotelawala Agreement, 1953: Under the agreement, India agreed to the repatriation of Sri Lankan Tamils who want to accept Indian citizenship. But at the same time, India rejected the Sri Lankan demand of granting citizenship to all Tamils who failed to qualify for Sri Lankan citizenship.
  • Shastri – Sirimavo Agreement, 1964: It sought to solve the problem of 9 lakh 75 thousand stateless persons in Sri Lanka using the following formula:
    1. 3 lakh people to get Sri Lankan citizenship.
    2. 5 lakh 25 thousand to get Indian citizenship in a period spanning over 15 years.
    3. The remaining 1.50 lakh stateless person’s fate was to be decided later.
  • Rajiv – Jayewardene Agreement (Indo-Sri Lanka Accord), 1987 :
    1. Creation of an autonomous unit comprising northern and eastern provinces (Tamils are concentrated in this area).
    2. Emergency to be lifted from northern and eastern provinces.
    3. Grant of official language status to Tamil, Sinhalese and English.

But the agreement was vehemently opposed by both Tamil & Sinhalese extremists.

XIII Amendment

It was the direct outcome of the Accord of 1987, and its terms were as follows:-

  1. Divide entire Sri Lanka into provinces.
  2. Adoption of the Federal System and give more powers to states.
  3. Remove Sinhalese Only Language Act and give equal status to the Tamil language.
  4. Land and Police should be provincial subjects.

What was the rationale?

  • Use Federalism to give some power to Tamils and end the feeling of deprivation among Tamils. 

Present status

  • Division of states has happened, but the rest of the provisions haven’t been implemented.
  • Later, the Supreme Court of Sri Lanka declared this Accord unconstitutional, saying that Land and Police being Union subjects is the fundamental feature of the Sri Lankan Constitution. 

Indian Peace Keeping Force (IPKF) posting in Sri Lanka was an utter failure

  • Crores of ₹ were spent on troops trying to restore order.
  • Hundreds of troops were killed in clashes with Tamils.
  • Even ethnic conflict wasn’t brought under control.
  • Operations of IPKF changed ethnic violence into civil war, which Sri Lanka was forced to continue even when Indian forces left in 1990 
  • It led to many political killings of both Indian and Sri Lankan leaders like Rajiv Gandhi (in 1991) and Premadasa (in 1993).

India’s rehabilitation measures for Sri Lankan Tamils

  • The construction of 43,000 houses for resettlement and rehabilitation of Tamils in Northern and Eastern Provinces. A $ 350 million grant to build houses is one of the significant grants by India in any country. 
  • India’s IRCON has constructed the train service at the north-western Sri Lankan town of Talaimannar – the closest point to India.  
  • Many Sri Lankan Tamils are still living as refugees in India.

Issue 2: Fishermen Issue


Fishing has been happening in this region since the Sangam period without any problem.


  • Indian fishermen venture into Sri Lankan waters, and Sri-Lankan Navy either fires upon them or arrests them. It leads to large scale suffering upon the fisherman community.
  • The Indian fishermen saw a golden business opportunity during the LTTE era as the Sri Lankan government had disallowed the easy movement of Sri Lankan fishermen in waters owing to military operations. However, with the LTTE war over, since 2010, there has been a resurgence of Sri Lankan fishermen in the Palk Bay. They were trying to reclaim their legitimate lost base and, in the process, became engaged in conflict. 
  • Unscientific Fishing by Indian Fishermen :
    • Indian fishermen use grill & synthetic nets, which is terrible for the overall ecology. On the other hand, Sri-Lankan Fishermen use ordinary nets. 
    • Indian fishermen use Trawlers (and not boats) and venture into Lankan waters. These trawlers are the leading cause of overexploitation. 
  • Tamil Fishermen still argue that they have a sovereign right over Katchathevu Island and go near the island to catch fish. In the process, Sri Lankan Navy arrest them. 
  • Indian trawlers are not equipped with GPS, and as a result, they don’t know about the exact coordinates. 
  • Some scholars argue that Sri Lankan government wants to aggravate this issue because Indian Tamils are the most prominent sympathizers of Sri-Lankan Tamils and their cause.


  • Tamil Nadu fishermen are not allowed to venture into the coastal waters of Andhra. If Indian fishermen typically observe such territorial limitations, there is no reason why they should not do so with northern Sri Lanka. 
  • Establish Palk Bay Authority in which Fishermen of both sides should dialogue to arrive at a solution. 
  • Solve trawler issue as trawlers & synthetic nets are the main culprit. Government should offer a voluntary buy-back scheme for trawlers and a rehabilitation package.
  • Indian government should equip Indian boats with GPS. 
  • Government should generate other jobs to end the overdependence of coastal areas on fishing. 

Palk Strait has always been a bridge between India and Sri Lanka since time immemorial, leading to the exchange of ideas and knowledge. Let it be a bridge and not a barrier between Indian and Sri Lanka.

Issue 3: Katchatheevu Island Issue

  • Katchatheevu is a small island located about 10 miles northeast of Rameswaram. The fishermen used it to dry their nets and catch fish. It also has a Catholic shrine and has been declared a sacred area. It has been a part of Raja of Ramnand’s territory, who controlled it as the lead zamindar. After the abolition of the Zamindari system, Katchatheevu became a part of the Presidency of Madras. No maps of Sri Lanka showed it as its territory. However, seeing its strategic location, Sri Lanka started claiming it. The issue was discussed some times during the meeting between Indian and Sri Lankan leaders.
Katchatheevu Island Issue
  • However, in 1974 Indira Gandhi signed an agreement whereby Katchatheevu was given to Sri Lanka. But 1974 had a provision under which Indian fishermen had the right to dry their nets on the island. 
  • The United Nations Convention on the Law of Seas (UNCLOS) changed the situation under which all the rights of Indian fishermen were taken away. Since then, Indian fishermen have been facing issues with Lankan authorities.
  • In 1991, Tamil Nadu Assembly passed a resolution demanding the retrieval of Katchatheevu Island from Sri Lanka and making the fishing grounds around the island accessible to the Tamil fisherman.
  • In 2008, the AIDMK filed a petition in the Supreme Court (SC) asking that the SC declare the 1974 and 1976 agreements unconstitutional.  
  • In 2014, the Union Government informed the Madras High Court that Sri Lankan sovereignty over the Katchatheevu island is a settled matter, and Indian fisherman doesn’t enjoy any fishing rights in the Sri Lankan waters.

Issue 4: China Angle

  • Sri Lanka is an integral part of the Maritime Silk Road (MSR) and the most crucial pearl in the Pearl of String Theory. 
  • China has already invested $4 billion in Sri Lanka. 
  • The most crucial development in this regard is Hambantota Port was developed with Chinese loans. Later, Sri Lanka couldn’t service debt and was forced to give the port to China on lease for 99 years.


Chinese Debt Trap in Sri Lanka
Chinese Debt Trap in Sri Lanka
  • China is following Debt Trap Diplomacy in Sri Lanka.   
  • China is trying to change the ‘Balance of Power in the Indian Ocean’, impacting India’s position as a Net Security Provider in the Indian Ocean.
  • Chinese projects don’t allow the development of auxiliary industry materials like cement, steel, labour etc., is also imported from China. Hence, jobs are not created in Sri Lanka. Sri Lanka has allowed China to build enclaves around the Colombo port, where Chinese people will reside. To authorize these enclaves, a separate statute has been passed by the Sri Lankan Parliament. 
  • Chinese projects are turning out to be White Elephants. ‘(epitomized by the Hambantota port, which was later given to China on a 99-year lease).
  • These projects impact Indian security as 
    1. Hambantota Port impacts the Indian position in the Indian ocean.
    2. Jaffna Hybrid Energy Project: A Chinese company was awarded the contract to install a hybrid renewable energy system about 50 km away from the Tamil Nadu coast.

What is India doing to counter this?

  • India is developing Trincomalee as Petroleum Hub and building infrastructure around it. 
  • India is developing Kakesuthai and Trincomalee as a port. 
  • India is developing the Eastern Terminal at Colombo port along with Japan (January 2021 update: Due to large scale demonstration by the trade unions against the privatization, the Sri Lankan government has cancelled this project).
  • India has decided to lease and manage the Mattala airport in Hambantota. (although, it is the emptiest airport in the world)
  • India has given a $300 million Line of Credit to upgrade Sri-Lankan Railways. 
  • Indo – Sri Lanka Nuclear Cooperation Agreement has been signed (the first such deal signed by Sri Lanka with any country). 
  • India has given aid of ₹ 5 billion in 2009 to reconstruct Tamil areas destroyed in the Civil War.

India can never match the Chinese in terms of Economic Muscle. India should also focus on ‘People to People Contact’ and use Buddhism and Buddhist Tourism Circuit to gain goodwill in Sri Lanka.

Issues with Indian Projects in Sri-Lanka

  • Delay in their completion and implementation. 
  • Many of these projects, like Mattala airport, are not seen as profitable for India. 
  • Indian ventures are seen as reactive to the increasing Chinese influence. 
  • Over-concentration of Indian development funding to Tamil areas.