Article by Prof. Tridivesh Singh Maini on "India and Sri Lanka Moving Towards a More Robust Relationship" - Future Directions

November 11, 2016 | Prof. Tridivesh Singh Maini

One of the encouraging aspects of India-Sri Lanka relations is the fact that both sides are working to strengthen the economic and strategic relationship and address what have been some of the major irritants in it. Only recently, on 5 November 2016, for instance, during talks between External Affairs Minister Sushma Swaraj and Sri Lankan Foreign Minister Mangala Samaraweera, in New Delhi, it was agreed to set up a Joint Working Group on Fisheries (JWG).

Both countries also agreed to set up a hotline between their two Coast Guards to deal with the long-standing issue of fishermen from the state of Tamil Nadu being arrested in Sri Lankan waters.
In recent years, the increasing presence of China in Sri Lanka has cast a negative shadow over the bilateral relationship. There has been, however, a significant shift with the change of guard in Sri Lanka, as the current government is keen to reduce its dependence upon China. India, for its part, is realising the economic potential of the Island Country, as well as its strategic location.
The level of trade between the two countries was estimated at US$4.6 billion, as of 2014. The Free Trade Agreement of 2000 gave a strong fillip to the economic relationship. Indian investments in Sri Lanka are estimated at US$844 million and are in a number of important sectors such as petroleum, IT, financial services, glass manufacturing and infrastructure. Some of the key investors include Lanka IOC (Indian Oil Corporation), Tata Communications, Axis Bank, ICICI Bank and Piramal Glass. Sri Lanka, however, has not been able to access the Indian market. During a visit to Colombo, Indian Commerce Minister Nirmala Sitharaman stated that Indian investments over the next four years are likely to rise to US$2 billion.
The Economic and Technology Co-operation Agreement (ETCA), which both sides are expected to sign by the end of 2016, is likely to further bolster their economic relationship and will enable Sri Lankan businesses to get greater access to the Indian market. While speaking at the Indian Economic Summit in October 2016, Sri Lankan Prime Minister Ranil Wickremesinghe referred to the immense possibilities that would ensue if the south Indian states – with a GDP of US$450 billion and Sri Lanka, with a US$50 billion GDP – could create a sub-regional economy of US$500 billion.
Increased co-operation between the two countries has not just been seen in the economic sphere, but also in the tourism sector. In July 2016, both countries signed a Memorandum of Understanding to aid each other in the promotion of tourism to their mutual benefit. Sri Lanka will encourage Indian tourists keen to visit sites which are part of the Ramayana trail, and the Indian Government will encourage tourists from Sri Lanka interested in visiting Buddhist sites.
In the contexts of both enhancing economic ties and tourism, India’s state governments are an important stakeholder. Indian state governments should reach out to Sri Lankan investors and encourage them to invest in India. Especially in the context of tourism, it is important for more and more state governments to reach out to Sri Lanka. A number of Sri Lankans visit Buddhist sites such as Sarnath (near the holy city of Varanasi, in Uttar Pradesh) and Sanchi and Bodh Gaya (in Bihar state). Last year, Sri Lankan President visited Ujjain for the Vichar Mahakumbh and also unveiled the statue of Dhammapathik Anagarika Dharmapala, a Sri Lankan Buddhist revivalist and writer who was one of the pioneers of non-violent Sinhalese Buddhist nationalism at Sanchi. The Chief Minister of Madhya Pradesh, Shivraj Singh Chauhan, announced the establishment of a friendship park at Sanchi to strengthen the friendship and cultural bonds between both countries. Delegates from Sri Lanka also attended the Buddhist conferences organised by the government of Orissa in 2013 and 2015.
To give a boost to economic ties broadly, as well as tourism more specifically, a number of steps are required. First, connectivity between the two countries needs to be enhanced. Currently, Sri Lanka looks more to southern India due to the better connectivity between them, but a number of other states in western and northern India could emerge as important markets, too. An important step could be to further increase the number of non-stop flights between both countries.
Second, state governments which have been reaching out to countries in East and South-East Asia should seek to capitalise not just on the location of Sri Lanka for its proximity to India, but also because it has the possibility of emerging as a gateway between South Asia and South-East Asia.
Third, the apprehensions of certain sections of the Sri Lankan population need to be dispelled that closer economic ties will only benefit India and that the greater opening up of the market will lead to the loss of Sri Lankan jobs. India needs to send a clear message that a robust bilateral relationship will be a win-win for both countries.
Both India and Sri Lanka need to adopt an imaginative approach to strengthening the bilateral relationship. That must include strengthening not just economic and strategic ties, but also more emphasis on people to people contact.