Renowned Scholar and Political Analyst Prof. John Mearsheimer recently commented on India’s rise to its current growth trajectory.
“The 2 principal ingredients of power are population size and wealth” – Prof. Mearsheimer interview with the Indian Express[1]
He further explains that India needs to be careful but is well on its way to become the next great power. A quick snapshot of the country’s key markers shows that:
i) Foreign Reserves as per the 6th of December 2024 amounted to USD 650 billion (Source: Reserve Bank of India)
ii) India currently holds 13% of the global market share in petroleum products (Source: Reserve Bank of India
iii) India’s merchandise exports amount to USD 39.2 billion, with a merchandise trade deficit of USD 27.1 billion as per October of 2024 (Source: Reserve Bank of India)
iv) India’s population is roughly 1.395 billion people as per 2023-2024 (Source: Reserve Bank of India)
This data basically says that India, is quite a heavy contender in the world stage in comparison to Sri Lanka.
>How will relations between India and Sri Lanka change in the coming years?
India is the 5th largest economy in the world, and has massively lifted its image as a backward, helpless nation, to commanding the respect of all major powers. Sri Lanka is currently in an IMF program, running at the whims of the international community and their economic prescriptions. The balance of power is alarming, to say the least.
Sri Lanka leasing Hambantota Port to China in 2017 triggered India’s concerns over China’s growing foothold, prompting India’s investments in Colombo’s West Container Terminal as a counterbalance. A project which was to be jointly funded by the United States International Development Finance Corporation and the Adani Ports & Special Economic Zone Limited. However due to allegations of bribery against Gautam Adani and his son for bribing Indian officials (for a different case), the U.S. entity had halted this transaction. This led to the Adani faction pull out of the agreement and source internal funding, a fairly strong blow to the bilateral relationship between the 2 countries[2].
Data from Sri Lanka’s Export Development Board and the High Commision of India in Sri Lanka shows that after the free-trade agreement between the 2 countries in March 2000, Sri Lanka has run bi-lateral trade deficits with India[3].
In 2023, Sri Lanka exported LKR 279,358 Mn to India, while importing over LKR 1,027,281 worth of products.
India’s Quad partnership with the US, Japan, and Australia significantly enhances its geopolitical influence in the Indo-Pacific region, positioning it as a key player in countering China’s growing dominance, particularly in maritime trade routes and strategic chokepoints. The Quad focuses on promoting a free, open, and inclusive Indo-Pacific, emphasizing cooperation in maritime security, infrastructure development, and supply chain resilience. This multilateral alignment allows India to project power and secure its regional interests while reinforcing its leadership role in South Asia. In contrast, Sri Lanka, despite its strategic location in the Indian Ocean, remains cautious about aligning too closely with any bloc, as it seeks to balance relations with major powers like India, China, and the US to safeguard its economic stability and sovereignty. This delicate balancing act highlights Sri Lanka’s efforts to extract economic benefits from all sides while avoiding entanglement in broader geopolitical rivalries.
The JVP has traditionally been opposed to India’s involvement in Sri Lanka’s internal affairs, particularly during the civil war. Alongside other nationalist movements, the JVP led an anti-India campaign from 1987 to 1990 against the Indo-Lanka Accord, framing it as part of their political discourse against “Indian expansionism.” However, in February 2024, an NPP delegation led by Anura Kumara Dissanayake, who is now the President of Sri Lanka, spent three days in India, engaging in meetings with Indian External Affairs Minister S. Jaishankar, government officials, and business leaders. During the visit, Dissanayake emphasized that India, as Sri Lanka’s closest neighbour and a major political and economic centre, must be considered in Sri Lanka’s decision-making processes. He stated that under the NPP’s leadership, economic and political decisions would take into account their impact on India, signaling a more pragmatic and cooperative approach to bilateral relations under his presidency.
>Anura & Modi Meet
Today we are witnessing the NPP leader’s visit to India as Sri Lanka’s president. One key incident that occurred during the press conference where both leaders addressed the public was the list of admissions Prime Minister Modi made.
An expected, yet standout point was the emphasis on the full implementation of the 13th amendment.
Another, was the commitment by Prime Minister Modi to supply liquefied natural gas (LNG), connect power grids, and lay a petroleum pipeline between India and Sri Lanka. This signals deepening energy ties, but raises questions about the implications for Sri Lanka’s sovereignty and long-term energy independence.
The LNG deal between India’s Petronet LNG and Sri Lankan firm LTL Holdings provides temporary relief to Colombo’s energy crisis. However, reliance on Indian infrastructure—such as the Kochi terminal—risks creating an overdependence on a single supplier, leaving Sri Lanka vulnerable to geopolitical leverage.
The proposed power grid connectivity and petroleum pipeline will integrate Sri Lanka’s critical infrastructure with India’s, reducing Colombo’s ability to diversify partnerships. For a nation already balancing economic ties with India and China, these projects risk tipping the scales, making Sri Lanka’s energy policies increasingly beholden to New Delhi’s interests and at the whims of the western bloc of nations.
Nepal and Bangladesh has learned this bitter lesson, when there was an overreliance on power from India.
In 2022, due to high prices of importing electricity from India and low local production of electricity Nepal had to cut power to its industries[4]. In 2019, during periods of peak demand, Nepal depended on India for over half of its electricity supply.
In October 2013, Bangladesh and India interconnected their electricity grids, marking the first time Bangladesh could purchase electricity from India and opening the door for increased energy cooperation. However, this reliance on India has put Bangladesh at a disadvantage. Recently, India’s Adani Power has reduced electricity supply to Bangladesh in its efforts to recover over $800 million in outstanding dues, according to data from Bangladesh’s grid operator and sources familiar with the situation. This highlights the vulnerability of Bangladesh, as its energy security is now tied to the policies and financial interests of India.
While India presents these initiatives as cooperation, Sri Lanka must critically assess whether this “lifeline” risks turning into economic and strategic dependency. As history has shown, such alignments often come with strings attached, leaving smaller nations with limited room to maneuver.
The two countries also agreed to collaborate on developing offshore wind power potential in the Palk Strait, where India’s Adani Green Energy Ltd. has already announced plans to invest $442 million in two wind power projects.
Modi stated that both countries aim to finalize the Economic and Technology Cooperation Agreement (ETCA) soon to strengthen bilateral trade ties.Talks on the ETCA were revived in November 2023 after a nearly five-year pause, with both nations also agreeing to improve trade settlements in local currencies and promote investments in key sectors in Sri Lanka.
Additionally, Prime Minister Modi announced plans to launch a ferry service between Rameshwaram in Tamil Nadu and Talaimannar in Sri Lanka to enhance connectivity between the two countries.
>What can we expect then?
Without a doubt Sri Lanka will need to work with India in the coming years, reaping the benefits of living next to a evolving economy, that is challenging the global power balance. As the saying goes, “people get to choose their neighbors, but countries cannot”
However, the severe lack of a foreign policy that was focused on Sri Lankan aspirations and a presidential address, that spoke of Sri Lanka’s interests were lacking. This is highly alarming and needs immediate attention. If objectively, Sri Lanka as a nation does not lay down what their uncompromising values are, the world will constantly get their way, while we lose the integral identity that has been built over generations.
A geo-political tussle between India, China and the United States is witnessed in Sri Lanka and its neighboring region, pushing the need for a multi-aligned strategy that creates space for economic growth over political backlash.
Further Reading:
https://website.rbi.org.in/documents/87730/115087777/November+Bulletin+2024.pdf
References
[1] https://www.youtube.com/watch?v=GGMAjrO2PqQ
[2] https://www.thehindu.com/business/Industry/adani-ports-opts-out-of-us-funding-for-sri-lanka-colombo-project/article68971748.ece
[3] https://www.hcicolombo.gov.in/page/india-sri-lanka-economic-and-trade-engagement/
[4] https://kathmandupost.com/money/2022/03/23/power-supply-to-industries-cut-off-due-to-reduced-imports#:~:text=Power%20supply%20to%20industries%20in,to%20reduced%20imports%20from%20India
