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Energy, infra, communication — India has big plans to help Sri Lanka & deepen relationship

Several proposals to strengthen the economic ties between India and Sri Lanka were discussed during a meeting of officials from various ministries chaired by the Deputy NSA earlier this month.

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New Delhi: Even before the crisis in Sri Lanka took a turn for the worse over the weekend, New Delhi had put together a comprehensive plan to step up its assistance to Colombo, boost critical infrastructure and to use the opportunity to strengthen traditional bonds between the two neighbours.

The island nation was brought to a boil Saturday with angry protesters storming the plush Presidential Palace, forcing President Gotabaya Rajapaksa to reportedly flee the nation. They then torched Prime Minister Ranil Wickremesinghe’s private residence in Colombo. 

Wickremesinghe, who was sworn-in as prime minister in May this year following the exit of Mahinda Rajapaksa, said in a tweet Saturday that he had accepted the recommendation of party leaders to step down and make way for an all-party government. Hours later, the Speaker of Sri Lanka’s Parliament announced that Gotabaya, too, will resign on 13 July.

Responding to a question about the latest developments in Sri Lanka, External Affairs Minister S Jaishankar told reporters outside the Thiruvananthapuram airport Sunday that India has been “very supportive of Sri Lanka” and is “trying to help”. 

The plan to look into “opportunities” to enhance India’s “economic linkages” with Colombo was discussed threadbare during an inter-ministerial meeting chaired by Deputy National Security Advisor (NSA) Vikram Misri on 1 July, top government officials familiar with it told ThePrint.

Besides a discussion on implementation of India’s priority projects, trade and connectivity in Sri Lanka, the need to fast-track a proposal to use the Indian rupee for transactions in Sri Lanka was also deliberated upon in the meeting, said officials. 

One of the officials said that India is working on a multi-sectoral approach, which is “more long-term” and aimed at “deepening trade and investment linkages”.

This would involve development of the Trincomalee Port on Sri Lanka’s northeastern coast, power projects, increasing frequency of flights connecting India and Sri Lanka, development of a fisheries harbour and the resumption of ferry services, among others. 

Sri Lanka is witnessing one of its worst economic crises, with the depletion of its foreign reserves having restricted the import of fuel and other essential commodities, triggering a massive shortage. 

New Delhi has already extended a helping hand, committing over $3 billion in loans, credit lines and credit swaps since January this year. Besides, India has also delivered essential medical supplies, food items, food grains and petroleum products to the island nation in its time of crisis.

India’s eagerness to reassert its presence in Sri Lanka comes in the backdrop of China’s growing influence in the island nation. Beijing, which ranks third among Colombo’s creditors and accounts for a little over 10 per cent of its outstanding debt, has invested heavily in infrastructure, including the development of strategic ports, in Sri Lanka. 

Sri Lanka has also borrowed massively from China to rev up its infrastructure under Beijing’s ambitious Belt and Road Initiative (BRI).

This growing Chinese presence in the island nation has raised concerns among the Indian establishment.

Also Read: Sri Lanka to Pakistan, South Asian nations are tying fortune to China’s infra projects & failing

‘Priority projects’ India is focussing on

A slew of “priority projects” – proposals to increase India’s trade and connectivity with Sri Lanka – were discussed during the inter-ministerial meeting chaired by the Deputy NSA earlier this month, government officials told ThePrint. 

This included enhancing India’s presence in petroleum retail in the island nation, preparing an integrated proposal for the development of Trincomalee port, plans for an energy hub, establishment of subsea connectivity to Kochi, and development of a transshipment port.

Developing an airport, setting up a refinery, the development of 2,400 acres of land as a heavy industries zone, and refurbishment of oil tanks were also part of the proposal, according to the minutes of the meeting seen by ThePrint. 

Ministries concerned, including the Ministry of Petroleum and Natural Gas and the MEA, have been directed to draw up a proposal in this regard and share it with Sri Lanka soon.

Chaired by Deputy NSA Misri, the meeting on 1 July was attended by senior officials from the Cabinet Secretariat and ministries of Finance, Commerce, External Affairs, Fisheries, Power, Civil Aviation, Petroleum, and New and Renewable Energy, among others.

A key area where India is keen on increasing its presence is the “economically strategic” sector of petroleum retail, said the official. Fast-tracking approvals for Lanka Indian Oil Corporation (LIOC), a subsidiary of Indian Oil, for taking over additional sheds – fuel stations/outlets – was also discussed in the meeting. 

Government officials aware of the plan said India is also looking to increase its presence and invest in Sri Lanka’s power sector. This includes finalizing the formation of a joint venture for the power grid connectivity project and fast-tracking the solar power plant in Sampur in eastern Trincomalee. 

India’s National Thermal Power Corporation (NTPC) had in March 2022 signed an agreement with Ceylon Electricity Board (CEB) to jointly set up the Sampur solar power plant, which once complete, will have the capacity to generate 100 MW (megawatts) of power.

A government official part of one of the infrastructure-related ministries said India is also looking to bolster air connectivity in Sri Lanka. “India is keen on increasing the frequency of flights connecting India to the northern province of Sri lanka,” the official said. 

Besides, the need to put in place “adequate measures and facilities” for resumption of ferry services from Kankesanthurai to Karaikal and Talaimannar to Rameswaram was also discussed during the meeting. This, the official quoted earlier said, will include identification of suitable operators and security clearances.

For India, another priority project is the development/upgradation of Point Pedro fisheries harbour located in Jaffna. The project will increase fisheries production in the northern province. 

According to the minutes of the meeting seen by ThePrint, the Department of Fisheries (under the Ministry of Fisheries) has been directed to expedite the examination of a proposal for joint management of this harbour.

Officials present in the meeting were of the view that India can also take up the issue of boats of Indian fishermen seized by Sri Lankan authorities in this context and impress upon the latter that their release can play a role in convincing local authorities to agree to the joint management proposal.

(Edited by Amrtansh Arora)

Also Read: Sri Lanka halts fuel supplies for private cars till 10 July, asks people to stay home


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