New Delhi: India is looking to push a plethora of developments projects in Sri Lanka — commercial as well as grant-based — after Prime Minister Mahinda Rajapaksa’s Sri Lanka Podujana Peramuna registered a landslide victory in the parliamentary elections last week.
Rajapaksa, also the former President of the island nation, took oath as prime minister again, and Indian government officials told ThePrint that he gave out a “strong signal” that Colombo is now being ruled by a “strong and stable” government.
“We have a unique relationship with Sri Lanka… We have another big list of projects, apart from the ongoing ones, both commercial and grant-based, that we propose to start on with the new government,” said a top official, who did not want to be named.
Important to maintain a robust relationship
The massive victory by Rajapaksa comes at a time when the Indian Ocean island nation has become strategically important for not just its big neighbours, India and China, but also for the US, Japan and Australia, as they give shape to the crucial Indo-Pacific strategy.
For India, it has now become critically important to maintain a robust and mutually beneficial political, strategic and economic bilateral relationship with Sri Lanka, keeping in mind the growing Chinese influence there with several lucrative developmental projects, Indian government sources said.
After all, it was during Mahinda Rajapaksa’s term as President that Colombo tilted towards China. Mahinda’s younger brother, Gotabaya Rajapaksa, is now the President of Sri Lanka, having won the presidential elections last November. In December 2017, Sri Lanka was forced to hand over the strategic Hambantota Port to the Chinese under a 99-year lease as it came under heavy debt.
Former diplomat Rajiv Bhatia, distinguished fellow at Gateway House, said: “It is clear to all now that Sri Lanka now has a very stable government. The Rajapaksas are once again all-powerful there and they are known to be pro-China. But they will now have to deal with India too. India now has to now manage the relationship well because we have divergence as well convergence with Sri Lanka. We need to be seen to be in the game.”
However, the official quoted above said: “We do not see the bilateral relationship between India and Sri Lanka through the prism of competition. We have undertaken with the Sri Lankan authorities a remarkable number of developmental projects in Sri Lanka, including complete reconstruction of northern and eastern Sri Lanka after the conflict.”
PM Narendra Modi was first to call Rajapaksa, even before his victory was final, to congratulate him. “We will work together to further advance all areas of bilateral cooperation and to take our special ties to ever newer heights,” Modi tweeted.
Thank you, Prime Minister @PresRajapaksa! It was a pleasure to speak to you. Once again, many congratulations. We will work together to further advance all areas of bilateral cooperation and to take our special ties to ever newer heights. https://t.co/123ahoxlMo
— Narendra Modi (@narendramodi) August 6, 2020
Rajapaksa also received congratulatory calls from Chinese President Xi Jinping, Japanese Prime Minister Shinzo Abe, Australian Prime Minister Scott Morrison and Pakistani Prime Minister Imran Khan, among others.
Saturday, Indian High Commissioner to Sri Lanka Gopal Baglay called on him, and later said: “The strong mandate received by Prime Minister Mahinda Rajapaksa provides a fresh opportunity for the two countries to enhance bilateral engagement, including mitigating the adverse economic effects of the COVID-19 pandemic.”
Projects on the ground and in the pipeline
Apart from a massive housing project in northern and southern Sri Lanka, India is involved in developing a multi-ethnic school in the North Central province. At Jaffna in the north, India is developing a cultural centre and 3,000 rainwater harvesting systems. It is also involved in renovating 27 schools there.
India is also planning to expedite some of the key projects, such as development of the Kankesanthurai (KKS) harbour in northern Sri Lanka, for which a line of credit (LOC) worth $45 million has been granted by New Delhi.
Besides, India is engaged in building to water-supply projects in western and north-western Sri Lanka under a $257 million LOC.
India is also hoping for movement on some future projects planned in Sri Lanka, like the development of a container terminal at Colombo Port worth $500 million, in collaboration with Japan. The project is under review by President Gotabaya.
Last month, the Reserve Bank of India (RBI) finalised an agreement to extend a $400 million currency swap facility to the Central Bank of Sri Lanka, which will remain available till November 2022.
India is now considering another currency swap agreement of $1.1 billion with Sri Lanka so that the country can pay off its debt. During President Gotabaya Rajapaksa’s visit to India last year, he had made the initial request for the $1.1 billion bilateral currency swap. At that time, he had also sought a moratorium on the loan Sri Lanka owes to India, which stands at around $1 billion.