New Delhi: India Saturday signed at least seven critical agreements in defence, energy connectivity and debt-restructuring with Sri Lanka, as New Delhi looks to cement its partnerships in the region.
Prime Minister Narendra Modi assured President Anura Kumara Dissanayake of India’s continued support for the economic recovery of Sri Lanka, and announced roughly 2.4 billion Sri Lankan rupees worth of grant-assistance for projects in the island nation’s eastern provinces.
The announcements came during Modi’s three-day visit to the island from 4-6 April.
“In the last six months, we have converted loans worth $100 million into grants. Our bilateral debt-restructuring agreement will give relief and immediate help to the people of Sri Lanka,” said Modi during a joint press statement with Dissanayake.
PM @narendramodi held fruitful talks with President @anuradisanayake in Colombo. The two leaders reviewed the full spectrum of India-Sri Lanka bilateral relations and explored avenues to deepen cooperation in sectors like energy, solar power, digital technology, trade,… pic.twitter.com/4sNtCSTvxr
— PMO India (@PMOIndia) April 5, 2025
The main outcome is the agreement of the first defence cooperation agreement between the two countries, which will see greater collaboration on military matters between New Delhi and Colombo. This is significant given the history both countries share following the Indian Peace Keeping Force (IPKF) missions in Sri Lanka between 1987 and 1990.
India provides subject-specific training to approximately 750 Sri Lankan military officers annually, while armed forces of both countries also routinely hold joint exercises. The new agreement, however, will allow the continued cooperation in defence ties in a more structured manner.
It will facilitate programmes for knowledge exchange amongst the personnel of the tri-services, training, discussions between senior military officials, information-sharing initiatives and cooperation in the fields of defence technology and research. The agreement is for a period of five years subject to termination by either party with a notice period.
The two nations also signed an agreement for connectivity of electricity grids for trade in energy. A tripartite agreement between India, the United Arab Emirates and Sri Lanka was also signed to promote Trincomalee as an energy hub. The tripartite agreement is another indication of the key role the UAE is playing in India’s larger outreach in the Indian Ocean region.
The three-day visit to Sri Lanka, will see Modi visit the Jaya Sri Mahabodhi temple in Anuradhapura Sunday, before returning to India. Sri Lanka is the second-leg of Modi’s two-nation tour, which began with Thailand on 3 April and 4 April, where the Prime Minister attended the BIMSTEC Summit and held meetings with leaders of Nepal, Thailand, Bangladesh and Myanmar.
Debt-restructuring & economic support
When Sri Lanka declared bankruptcy in 2022, India stepped in and extended loans close to $4 billion, to help stabilise Colombo’s economy. It gave assurances to the International Monetary Fund (IMF), which allowed the multilateral financial institution to extend further financial funding to Colombo, as well as co-chairing the Official Creditors Committee.
The debt-restructuring agreement comes at a time when Colombo is still recovering from its economic meltdown. Modi also announced that interest rates on the debt have been reduced following his visit to the island nation.
Sri Lanka plays a key role in India’s larger ‘MAHA-SAGAR’ vision of the region. Before its economic challenges, the nation had been perceived as pivoting towards Beijing, with large-scale Chinese investment flowing into the country, along with the use of its ports for its research ships.
Permission for research ships to berth at Sri Lankan ports was an irritant to ties between New Delhi and Colombo. While the previous administration issued a moratorium on the berthing of such ships to their ports in December 2023, for one year, there has been no clarity on whether it has been extended. Modi did, however, thank Dissanayake for being mindful of “India’s security concerns”.
The issue of fishermen was also discussed, where Dissanayake warned against the practice of bottom-trawling allegedly by Indian fishermen in their waters. Modi urged a humanitarian approach to dealing with the issue.
Modi was also awarded the Mitra Vibushana medal, one of Sri Lanka’s state honours for foreign leaders. The Indian Prime Minister is the fourth international leader to receive the award and the first in 11 years.
(Edited by Amrtansh Arora)