India-Sri Lanka bilateral relations

India is the closest neighbour of Sri Lanka and the relations between the two countries is over thousands years old, where both sides have built a legacy of deep cultural, intellectual, linguistic and religious interaction. In fact, relation between India and the small island nation have diversified and matured with passage of time and has encompassed all major areas of bilateral and contemporary relevance.

India-Sri Lanka Relations

For one, India is involved in several developmental and infrastructural projects in Sri Lanka. These include renovation of the Palaly Airport, the Kankesanthurai Harbour, construction of a cultural centre at Jaffna, interconnecting electrical grids between the two countries and setting up a thermal power plant at Sampur as a joint venture enterprise between the Ceylon Electricity Board (CEB) and National Thermal Power Corporation (NTPC). The Kankesanthurai Harbour project is a fully government of India funded one, built at a cost of Rs. 85.5 crore and was completed in January, 2012, while the Jaffna cultural centre is slated to be completed later this year.

Besides, India continues to assist many smaller projects in areas like education, health, transportation and medium and small enterprise development in Sri Lanka. The memorandum of understanding on Cooperation in Small Development Projects (CSDA) was renewed in June 2010, during the visit of President Mahind Rajapaksa’s visit to New Delhi in June 2010. The CSDA increased the financial limit of projects to SL$ 300 million. The projects included proving fishing equipment for cooperatives in the eastern part of Sri Lanka, equipment to the Jaffna Teaching Hospital, repair of school building in Northern Province, reactivation of the Achuvely Industrial Zone, and supply of equipment to the Mulaittivu and Kilinochchi general hospitals. Several of the said projects are already completed or are in several stages of completion.

Sri Lanka and India enjoy a strong trade and investment relation. Bilateral trade has grown rapidly over the last decade and several major Indian private sector enterprises have established a strong presence in the country. Colombo is the biggest trading partner of New Delhi in South Asia, and the latter, in turn is the former’s largest global trade partner. The Indo-Lanka free trade agreement, inked in March 2000, has enabled a quantum growth of the trade volume. Over the last 12 years, bilateral trade has multiplied over five-fold and India has emerged as the number one source country as regards foreign direct investment as well as tourist arrivals to Sri Lanka.

There has also been an increasing trend of Lankan investments in India. Major instances include Carsons Cumberbatch (Carlsberg), Ceylon Biscuits (the Munchee brand), John Keels, MAS holdings and Aitken Spence (hotels), and other investments in the logistics and freight servicing sector.

The Indo-Lanka relationship, today, is robust and poised for a voluminous jump in the coming years. Experts say that this would be forged by increased cooperation in trade and commerce and cultural exchanges. Defence, also, would be an area of cooperation between the two countries as both sides are expected to have exchanges as regards military and naval exercise to prevent threats to sovereignty against either nation.

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