Home » India’s Opportunity in Post-Crisis Sri Lanka

India’s Opportunity in Post-Crisis Sri Lanka

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The crisis in Sri Lanka has cast a shadow of uncertainty over the island country’s economic and political stability, which may have severe geopolitical repercussion on the countries of South Asia, particularly India.

China is one of the largest bilateral creditors to Sri Lanka, accounting for around 20 percent of overall Sri Lankan debt. The Chinese loans, which were mostly been used to build economically nonviable “white elephant” projects, are seen as one of the factors that hastened the economic collapse of Sri Lanka and gave rise to allegations of “debt-trap diplomacy.” Despite these allegations, China has deepened its engagement with the island by making huge investment in various projects, especially related to maritime infrastructure.

From India’s point of view, China financial heft and Sri Lankan dependence on Beijing’s largess can greatly bolster Chinese leverage, which may lead to an increased use of Sri Lankan infrastructure for strategic-military purposes – as evidenced by the recent docking of the Chinese navy’s scientific ship Yuan Wang 5 in Hambantota port and the allegations of Sri Lankan tankers providing mid-sea logistical support to Chinese naval ships. The Sino-Indian geopolitical rivalry, coupled with India’s aspiration of being a net provider of security and stability in the region, have made it imperative for New Delhi to deepen its developmental and humanitarian engagements in Sri Lanka.

Since the onset of Sri Lanka’s ongoing crisis, India has acted with alacrity to provide succor to the island nation. With Colombo facing an acute shortages of funds, India extended $4 billion to keep the country’s accounts afloat. India has also vocally supported Colombo’s demands for an International Monetary Fund bailout package and restructuring of its debt. In one instance, the Indian naval ship Gharial was deployed to deliver supplies of medicines, highlighting the expeditious manner in which India sought to extend humanitarian help to Sri Lanka.

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The unprecedented humanitarian and financial aid provided by India on such short notice showcases the country’s unique position in terms of its proximity to Sri Lanka and its capacity as well as capability to extend aid at a strategic level. Such assistance provided by India may well garner goodwill in Sri Lanka, but India’s long-term interests will be better served by weaving the geostrategic characteristics of the region into its Sri Lanka policy. The maritime geography of the island nation provides immense potential in solidifying maritime linkages through capacity and capability building in the arena of maritime connectivity and security.

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Maritime Connectivity

Sri Lanka aspires to be a “strategic hub”  in terms of maritime connectivity, given the geoeconomic advantages enjoyed by its ports, especially Colombo, due to their proximity to the major East-West maritime route that cuts across the Indian Ocean. With that in mind, Indo-Lankan cooperation in expanding port infrastructure can greatly boost maritime connectivity at the regional level and augment synergistic linkages in the bilateral relationship.

Colombo port is one of the busiest ports in the world, and one of the few ports in South Asia that can cater to large container vessels. Ships traversing the East-West maritime route can dock at Colombo port with much less deviation time compared to other South Asian ports. This comparative advantage makes it a port of preferred choice for shipping companies. This has also made the Colombo port a transshipment hub, shipping India-bound cargo to the Indian ports through smaller vessels. Colombo port alone is reported to handle 43 percent of India’s transshipment cargo.

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With the whole South Asian region witnessing a massive increase in the use of container ships, the region’s ports capacity is lacking. The expansion of Colombo port terminals can boost regional container capacity in absolute terms and also boost synergistic maritime-trade connectivity with other countries of South Asia, especially India.

While the Indian company Adani Ports is currently developing the West Container Terminal (WCT) of Colombo port, the displeasure in New Delhi over Sri Lanka’s reneging on the East Container Terminal (ECT) project, which was earlier handed to an Indo-Japanese joint venture, still lingers. Moreover during the crisis, Colombo port faced a momentary slowdown in operations due to forex and fuel shortages. This highlights the risk of port operations being solely reliant on domestic funds in a country having a fragile economy.

Given the predicament that it faced during the above crisis, New Delhi should be open to any future offer to acquire a stake in the development and running of the ECT. Unlike the WCT, which is only in the initial phase of construction, the ECT is already operational and, in overall terms, the expansion of Colombo’s port capacity will bolster maritime logistical infrastructure and provide greater stability to regional maritime network.

Trincomalee port, situated in the second largest natural harbor in the world, is seen as a potential industrial port, which can boost productivity of nearby industrial, economic, and energy hubs. Currently the port has three terminals that mostly service ships carrying cargo of fish, oil, industrial goods, and agricultural products. The Sri Lankan subsidiary of Indian Oil Corporation (Lanka IOC) operates 14 tanks in the Trincomalee oil tank farm, which is adjacent to the Trincomalee port. There remains the possibility of expanding port infrastructure to increase its capacity to cater to bulk and break-bulk cargo. Notwithstanding some issues related to dredging, an expansion of the port for greater intake of cargo can not only make the port a gateway to the eastern and northern hinterlands of Sri Lanka but may also boost connectivity with India, especially in the energy sector.

Another port that offers opportunities for bilateral cooperation is Kankesanthurai port near the northern tip of Sri Lanka. The port was damaged and closed during Sri Lanka’s civil war, and its approach was littered with submerged debris. India helped in reconstructing Kankesanthurai port and has also funded construction of railway lines linking Kankesanthurai with the hinterlands of northern Sri Lanka.

Kankesanthurai, with its ancient and medieval temples, has been attracting pilgrims from around the world, especially from southern India. The port is adjacent to religious and cultural hotspots and, if properly developed, it could boost maritime connectivity between India and Sri Lanka, especially in terms of tourism. Ferry services linking Kankesanthurai with southern Indian cities, particularly cities like Rameswaram, Puducherry, and Chennai, may be feasible and economically viable options that can augment people-to-people linkages between India and Sri Lanka.

Maritime Security

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The SLINEX naval exercises have become one of the most visible manifestations of Indo-Sri Lanka bonhomie in terms of maritime security. Sri Lanka is a part of India’s regional maritime security architecture with Sri Lankan coastal surveillance radars being integrated to the International Fusion Center – Indian Ocean Region (IFC-IOR) at Gurugram in India. Given Sri Lanka’s strategic location close to the East-West maritime route, it is imperative for India to deepen maritime security ties with Colombo so as to build a “favorable and positive maritime environment.” Gaps in coastal surveillance can be further closed by installing more coastal surveillance radars along the Lankan coast and linking them to the IFC-IOR.

India is part of the Colombo Security conclave, a trilateral grouping involving Sri Lanka and Maldives, two island states of South Asia. Given its focus on maritime security, the trilateral mechanism could be instrumental in enhancing maritime domain awareness, intelligence sharing, coordinated joint patrolling, and capacity as well as capability building cooperation that can bolster efficiencies in search and rescue, humanitarian assistance and disaster relief, and anti-smuggling and anti-IUU fishing operations. The recent agreement on the setting up of a maritime rescue coordination center in Sri Lanka with India’s help is a step in the right direction.

With rising sea levels and warming of the ocean’s surface, climate change-induced challenges have begun to impact nations around the world. The increasing frequency of cyclones is being witnessed in the Bay of Bengal and the Arabian Sea, which urgently calls for international cooperation in disaster management in South Asia. India’s disaster management efforts have greatly improved over the years and the National Disaster Management Authority has performed fairly well in disaster relief and evacuation operations, particularly during the super cyclones like Amphan and Tauktae.

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There’s much potential for enhanced bilateral cooperation on mitigating risks arising from increased occurrence of cyclonic storms like the construction of cyclone shelters and cyclone resistant critical infrastructure, integration of nature-based solutions like mangrove forests into mitigation strategies, and the provision of resilient livelihood options to people threatened by climate change. Issues like coastal erosion or the effects of climate change on fishing and maritime security infrastructure are some of the common impediments to sustainable development and security for both India and Sri Lanka. Broadly speaking, locating climate change hotspots and mounting concerted efforts in arresting climate change-induced disruptions and reducing vulnerability will help in improving the region’s resilience to these critical challenges.

While India has provided immediate help to Sri Lanka amid the economic crisis, progress toward long-term regional stability, especially in the maritime domain, can be made through capacity and capability building projects in ports, transshipment, energy, fisheries, and measures to address climate change. Such bilateral engagements between India and Sri Lanka can lead to lasting geoeconomic and holistic maritime security linkages between the countries and create a stable geopolitical environment in the region.

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