Strengthening India- Sri Lanka Ties

• 13 Nov 2025

This editorial is based on “ Fishing troubles: On India, Sri Lanka, the Palk Bay fishing issue”, which was published in The Hindu on 12/11/2025. The article discusses the longstanding India-Sri Lanka fishing dispute in Palk Bay, highlighting ecological damage, economic losses, legal complexities, and the need for sustainable, cooperative solutions to resolve conflicts between fishermen of both countries.

For Prelims: Palk Bay, Colombo Security Conclave (CSC), SLINEX, MITRA SHAKTI, Vesak Day, Katchatheevu Island dispute, Neighbourhood First Policy, Act East Policy, BIMSTEC, Security and Growth for All in the Region (SAGAR) Initiative 

For Mains:  Significance of the India-Sri Lanka Relationship, Major Challenges Affecting India–Sri Lanka Relations Today, India’s Key Foreign Policy Initiatives to Strengthen Relations with Its Neighbours

The Palk Bay fishing dispute between India and Sri Lanka highlights a conflict between traditional livelihoods and environmental sustainability. Recent arrests of fishermen and the use of destructive bottom trawling have harmed marine ecosystems and strained ties. Resolving this issue requires sustainable fishing practices, joint resource management, and diplomatic engagement. The future of bilateral relations depends on trust-building, strategic cooperation, and a shared commitment to regional stability. 

What is the Significance of the India-Sri Lanka Relationship? 

• Historical and Civilizational Linkages: India and Sri Lanka share 2,500 years of cultural and civilizational ties, rooted in Buddhism, language, and trade. 
  • Emperor Ashoka’s son, Mahinda, introduced Buddhism to Sri Lanka in the 3rd century BCE — a bond still symbolised through Buddhist pilgrimages and relic exchanges. 
  • Shared linguistic and ethnic connections exist between Tamil Nadu and Northern Sri Lanka, fostering cultural continuity. 
• Strategic and Geopolitical Importance: Sri Lanka’s location near the major sea lanes of communication (SLOCs) in the Indian Ocean gives it immense strategic relevance for India’s maritime security. 
  • The island sits close to India’s southern coast (just 30 km across the Palk Strait), making stability in Sri Lanka crucial for India’s security architecture. 
  • Cooperation through the Colombo Security Conclave (CSC), involving India, Sri Lanka, the Maldives, and Mauritius, strengthens regional counter-terrorism and maritime surveillance efforts. 
• Economic and Trade Relations: The economic and trade relations between India and Sri Lanka remain robust, with bilateral merchandise trade reaching USD 5.54 billion in FY 2023–24.  
  • Of this, India’s exports to Sri Lanka amounted to USD 4.11 billion, while Sri Lanka’s exports to India stood at USD 1.42 billion, reflecting India’s position as a major trading partner and highlighting the existing trade imbalance between the two nations. 
  • India is among the largest FDI contributors, with USD 2.25 billion cumulative investment till 2023. 
  • Economic and Technology Cooperation Agreement (ETCA) negotiations resumed in October 2023, aiming for deeper trade and investment integration. 
  • Sectors like energy, pharmaceuticals, and IT are expanding under India’s ‘Neighbourhood First’ policy. 
• Development and Humanitarian Assistance: India has extended USD 6 billion in credit and USD 780 million in grants for projects in housing (60,000 units), education, healthcare, and renewable energy. 
  • During Sri Lanka’s 2022 economic crisis, India provided USD 4 billion through credit lines, currency swaps, and humanitarian aid, reinforcing trust and goodwill. 
    • Also, India became the first country to assure the IMF of its debt restructuring support to Sri Lanka(ORF) 
  • People-centric projects cover all provinces, ensuring inclusive development. 
• Defence and Security Cooperation: Marked by a landmark 5-year Defence MoU signed in 2025, structuring joint exercises (SLINEX, MITRA SHAKTI), maritime surveillance, training, and cooperation in defence technology. 
  • Indian Navy’s Dornier aircraft operate in Sri Lanka for maritime surveillance; India offers around 1200 training vacancies annually for Sri Lankan armed forces. 
  • India has played the role of first responder during environmental disasters in Sri Lankan waters (MV XPress Pearl, MT New Diamond) and collaborates on counter-terrorism through the Colombo Security Conclave. 
• Connectivity and People-to-People Contact: Ferry services (Nagapattinam–Kankesanthurai, 2023), Chennai–Jaffna flights (2022), and UPI-based digital payments (2024) enhance connectivity. 
  • India is Sri Lanka’s largest tourist source, accounting for over 4.16 lakh arrivals in 2024 (~20%). 
  • Initiatives like ‘Study in India’ and ITEC scholarships foster educational exchanges. 
  • Projects like the Indian Gallery at the International Buddhist Museum and the restoration of historical temples reinforce Buddhist heritage diplomacy. 
  • Joint celebration of Vesak Day and translation of Jataka Tales into Sinhala promotes cultural harmony. 

What are the Major Challenges Affecting India–Sri Lanka Relations Today?  

• Fishermen Dispute: The Katchatheevu Island dispute persists, with Indian fishermen allowed only limited access for non-fishing activities despite sovereignty resting with Sri Lanka. 
  • Over 500 Indian fishermen were arrested by Sri Lankan authorities in 2024 alone for alleged fishing violations in Sri Lankan waters. 
  • In 2024, Sri Lanka confiscated 71 Indian fishing boats, which were subsequently nationalised under the provisions of the 2018 law, reflecting the continuing tensions over fishing rights and maritime boundary violations in the Palk Bay region. 
  • Bottom trawling by Indian mechanised fleets damages coral reefs and shrimp habitats in Palk Bay, banned in Sri Lanka since 2017. 
    • These ecological impacts threaten the livelihoods of small-scale fishermen in Sri Lanka’s Northern Province and fuel cross-border tensions. 

• Chinese Strategic Influence: China’s control over Hambantota Port, under a 99-year lease since 2017, symbolizes deepening Chinese presence in Sri Lanka’s strategic maritime space, causing Indian security concerns about China’s military intentions. 
  • Frequent sightings of Chinese naval and surveillance vessels near Sri Lanka and Indian Ocean waters aggravate India’s strategic vigilance. 
  • Chinese infrastructure loans and Belt and Road Initiative (BRI) projects in Sri Lanka raise debt-trap diplomacy worries for Sri Lanka and geostrategic challenges for India. 
• Domestic Political Instability in Sri Lanka: Frequent changes in Sri Lankan leadership since the 2022 economic crisis create uncertainties in policy continuity, affecting bilateral projects such as port development, connectivity initiatives, and energy cooperation. 
  • Political instability delays project implementation and complicates India's strategic planning. 
• 13^th Amendment and Tamil Ethnic Issue: Slow and partial implementation of the 13th Amendment post-civil war restricts meaningful devolution of power to the Tamil-majority Northern and Eastern provinces. 
  • Tamil Nadu political actors actively advocate for Sri Lankan Tamil rights, influencing India's foreign policy and complicating bilateral conversations. 
  • Ethnic reconciliation and political autonomy remain sensitive issues, necessitating careful diplomatic balancing. 
• Trade Imbalance and Economic Cooperation: India’s merchandise exports to Sri Lanka stood at USD 4.11 billion in FY 2023-24, while Sri Lankan exports to India were USD 1.42 billion, contributing to domestic criticism in Sri Lanka regarding trade deficits. 
  • Negotiations on the Economic and Technology Cooperation Agreement (ETCA) have resumed after five years, aiming to facilitate trade and investments but face resistance over perceived economic sovereignty concerns. 
• Local Resistance to India’s Growing Role in Sri Lanka: Some Sri Lankan groups perceive India’s dominant economic and strategic presence as intrusive, fostering nationalist backlash. 
  • Infrastructure projects like land bridges or Indian investments in the Northern Province face local resistance due to concerns over sovereignty and local economic control. 
• Maritime Border Security and Smuggling: Porous maritime boundaries facilitate narcotics trafficking, unauthorised immigration, and illegal smuggling activities, posing security threats. 
  • Both nations continue joint efforts to enhance maritime surveillance and coastal security but face operational challenges. 
  • For instance, in 2021, the Indian Coast Guard intercepted a Sri Lankan trawler near Vizhinjam, Kerala, seizing 300 kg of heroin, five AK-47 rifles, and 1,000 rounds of ammunition.

What Major Foreign Policy Initiatives has India Undertaken to Deepen Ties with Its Neighbours? 

• Neighbourhood First Policy: The policy emphasises stronger physical, digital, and cultural connectivity with neighbouring countries such as Bhutan, Nepal, Sri Lanka, Maldives, Myanmar, Bangladesh, and Afghanistan.  
  • It is guided by the principles of respect, dialogue, peace, and prosperity, with India’s support spanning from major infrastructure initiatives to grassroots development projects. 
• Act East Policy: The Act East Policy, upgraded in 2014 from the earlier Look East Policy, broadens India’s engagement with Southeast Asia and the Indo-Pacific.  
  • With ASEAN at its core, the policy promotes economic partnerships, cultural exchanges, and security cooperation. 
  • India has simultaneously strengthened bilateral ties and taken an active role in regional forums such as the East Asia Summit, QUAD, and ASEAN Defence Ministers Meeting Plus, reinforcing its strategic and diplomatic presence in the region. 
• Security and Growth for All in the Region (SAGAR) Initiative: Launched in 2015, SAGAR aims to strengthen India’s maritime cooperation and security engagement with Indian Ocean littoral states. 
• BIMSTEC and SAARC Revitalisation: India pushes for revitalising regional groupings like SAARC and promoting sub-regional cooperation through BIMSTEC with institutionalised summits and dialogues to foster structured, predictable, and sustained regional diplomacy. 
• Digital Diplomacy and Connectivity: India has introduced cross-border digital payment interoperability (e.g., UPI acceptance by Nepal), shares open-source governance platforms, and promotes capacity building in cybersecurity to build tech-enabled, people-centric regional connectivity and economic integration. 
• Defence and Strategic Partnerships: Initiatives like joint military exercises, capacity building in defence manufacturing under ‘Innovation for Defence Excellence (iDEX)’, and security cooperation with neighbours enhance regional stability and counter external influences. 
• Development Partnership and Humanitarian Assistance: India remains the largest development partner in the region, providing credit, grants, disaster relief, vaccines, and evacuation support during crises. (e.g., 2015 Nepal earthquake aid, COVID-19 vaccine sharing, Operation Ganga).  

What Steps Should India Adopt to Strengthen its Bilateral Relationship with Sri Lanka? 

• Institutionalise Sustainable Fisheries Cooperation: India should establish a robust bilateral fisheries management mechanism with Sri Lanka, incorporating joint patrolling, regulated shared fishing zones, and fisherfolk livelihood support. 
  • Following models like the EU’s Baltic Sea fisheries framework, this would reduce arrests and ecological harm.  
  • India could provide subsidies and training to fishermen transitioning from bottom trawling to deep-sea fishing, encouraging sustainable practices and reducing cross-border tensions. 
• Counterbalance External Influence through Strategic Defence Partnership: Building on the landmark 5-year Defence MoU signed in 2025, India must enhance joint maritime patrols, intelligence sharing, and capacity building in Sri Lanka’s navy to safeguard regional security.  
  • Offering defense platforms and disaster response training strengthens maritime domain awareness.  
  • These efforts must counterbalance China’s growing footprint in Sri Lanka’s strategic infrastructure while respecting Sri Lankan sovereignty. 
• Accelerate Political and Ethnic Reconciliation Support: India should support the full, genuine implementation of Sri Lanka’s 13th Amendment through diplomatic channels and back multi-stakeholder reconciliation forums. 
  • Engagement with Tamil Nadu’s political representatives alongside Sri Lankan stakeholders can create inclusive dialogue pathways, thereby easing ethnic tensions and ensuring India’s regional stability interests. 
• Revitalise Trade and Investment Frameworks: India should expedite finalization of the Economic and Technology Cooperation Agreement (ETCA) talks with Sri Lanka, ensuring equitable access and addressing Sri Lankan concerns over trade imbalances through phased liberalization and safeguards.  
  • Facilitating INR–LKR trade settlements and mobilizing investments in key sectors such as energy, tourism, and digital economy will boost Sri Lanka’s economic growth and bilateral commercial ties. 
• Support Sri Lanka’s Economic Recovery and Infrastructure Development : India must continue robust development cooperation with concessional loans, grants, and technical assistance in ongoing projects like the Indian Housing Project and renewable energy initiatives. 
  • Jointly developing ports like Kankesanthurai and facilitating ferry services will enhance connectivity and economic hubs.  
  • Transparent project monitoring ensures impact and Sri Lanka’s fiscal sustainability. 
• Expand Capacity Building and Digital Governance Collaboration : Leveraging India’s success with digital public infrastructure, India should accelerate support for Sri Lanka’s Unique Digital Identity (SLUDI) project and Digital Public Infrastructure rollout.  
  • Scaling training of civil servants (1500 over five years), STEM educators, and health professionals nurtures human capital for Sri Lanka’s modernisation. 
  • Expanding higher education and research collaborations will deepen institutional ties. 
• Promote People-to-People and Cultural Exchanges: India should intensify cultural diplomacy, supporting the restoration of heritage sites and enhancing tourism promotion, given that India is Sri Lanka’s largest tourist market. 
  • Expanding air connectivity, cultural exchange programs, scholarships, and joint Buddhist pilgrimages will deepen social bonds, reducing perceptions of imbalance and fostering goodwill between societies. 

Conclusion: 

As scholar Joseph Nye noted, “Soft power is not coercion but attraction, persuasion, and appeal.” India’s engagement with Sri Lanka exemplifies this principle through a blend of diplomacy, development assistance, and cultural partnership. Going forward, India must strengthen cooperation in areas such as sustainable fisheries management, economic integration, and regional security, while promoting ethnic reconciliation and people-to-people connections.  

Drishti Mains Question:

“India–Sri Lanka relations are marked by both convergence of interests and persistent irritants.” Examine the major challenges affecting bilateral ties and suggest measures to institutionalise sustainable cooperation. 

Frequently Asked Questions (FAQs)

1. What is the strategic and civilisational significance of India–Sri Lanka relations?
India–Sri Lanka ties rest on 2,500 years of civilisational links (Buddhist heritage, Tamil ties) and strategic importance due to Sri Lanka’s location near major SLOCs and the Palk Strait (~30 km), making the island crucial for India’s maritime security and regional stability.

2. What are the key facts on economic engagement between India and Sri Lanka?
Bilateral trade stood at USD 5.54 billion (FY 2023–24) (India exports USD 4.11 bn, Sri Lanka USD 1.42 bn); India is a major FDI partner (USD 2.25 bn cumulative till 2023) and has provided ~USD 7 bn credit and USD 780 mn grants, including ~USD 4 bn support during the 2022 crisis.

3. What is the nature and scale of the fishermen's dispute in Palk Bay? 
The Palk Bay dispute involves over 500 Indian fishermen arrested in 2024, frequent seizure/destruction of boats, territorial access issues (Katchatheevu) and ecological damage from bottom trawling, aggravating livelihood losses and bilateral tensions.

4. How does external (Chinese) influence pose a challenge to India–Sri Lanka ties? Chinese strategic presence—notably Hambantota Port (99-year lease from 2017) and BRI projects—raises Indian concerns over geostrategic influence, maritime access and potential debt vulnerabilities, complicating India’s security calculus in the Indian Ocean.

5. What policy measures are proposed to stabilise and deepen bilateral cooperation? 
Recommended steps include institutionalising bilateral fisheries management (joint patrols, shared zones), fast-tracking ETCA with safeguards, implementing the 5-year Defence MoU (2025) for maritime cooperation, supporting SLUDI/Digital Public Infrastructure, and scaling capacity building (scholarships, ITEC, civil-service training).

UPSC Civil Services Examination, Previous Year Questions (PYQs)

Prelims: 

Q. Elephant Pass, sometimes seen in the news, is mentioned in the context of the affairs of which one of the following? (2009)

(a) Bangladesh  

(b) India   

(c) Nepal  

(d) Sri Lanka  

Ans: (d)

Q. Consider the following statements: (2020)

1. The value of Indo-Sri Lanka trade has consistently increased in the last decade. 
2. “Textile and textile articles” constitute an important item of trade between India and Bangladesh.  
3. In the last five years, Nepal has been the largest trading partner of India in South Asia.  

Which of the statements given above is/are correct?  

(a) 1 and 2 only   

(b) 2 only  

(c) 3 only   

(d) 1, 2 and 3  

Ans: (b)

---

Mains

Q. ‘India is an age-old friend of Sri Lanka.’ Discuss India's role in the recent crisis in Sri Lanka in the light of the preceding statement. (2022)

Q. In respect of India-Sri Lanka relations, discuss how domestic factors influence foreign policy. (2013)