Sri Lanka's New Foreign Policy Presents Opportunities for India

Sri Lanka’s government wants a more balanced foreign policy and that’s good news for India.

By Jhinuk Chowdhury-

August 24, 2015

One of the election platforms of the recently sworn-in Sri Lankan prime minister, Ranil Wickremesinghe, has been to revise Sri Lankan foreign policy, which has been excessively oriented toward China in recent years, instead favoring a more balanced posture.

Under the previous regime of Mahinda Rajapaksa, both India and the West were increasingly alienated while the Chinese had free play in the country, crystallized in terms of investment in infrastructure or financing offers.

Wickremesinghe is expected to reverse this by devising a foreign policy that is more broad-based, with renewed outreach to India, the United States, Europe, and Japan.

As Sri Lanka continues this process, New Delhi–with Indian Prime Minister Narendra Modi’s new focus on the Indian Ocean Region (IOR)–could become Colombo’s most important partner as it strives to revamp its economy and emerge from over a decade-long period of international isolation.

As Wickremesinghe stated after his victory in the recent elections, “It’s a new chapter in Sri Lankan politics itself. Therefore, we should have close relations with India.”

With bilateral trade at $5.2 billion in 2013-14, Modi, during his visit to Sri Lanka earlier this year, pitched an expansion of the India-Sri Lanka free trade agreement (FTA) and came out in favor of balancing bilateral trade, which currently favors India.

Apart from an agreement on civil nuclear cooperation for peaceful use, Modi also pushed for a coal-based power project and over- and under-sea transmission line projects connecting India and Sri Lanka.

Experts say this could well lead to a “renewed wave“ of Indian investment in the country. As India steps up its investment in the Indian Ocean, financing projects like the Sittwe port in Myanmar, and Chabahar port in Iran, Sri Lanka rises in importance.

So far, New Delhi has focused on reconstructing the war-ravaged Tamil-dominated northern areas of the country. Future focus will be on investment in the maritime realm.

Experts say that with the right amount of investment, Colombo and Mumbai, today the busiest ports in South Asia, could become regional hubs rivaling Singapore.

However, with its own infrastructure overhaul requirements, India cannot entirely fulfill the needs of Colombo. Invariably Sri Lanka will have to look toward investments from bigger powers.

The U.S., Japan and Australia are the most important countries that Colombo can turn to. All three countries are highly interested in deepening their footprints in the IOR.

The keen interest of Western powers in the region is evidenced by the fact that immediately after Maithripala Sirisena assumed the presidency earlier this year, U.S. Secretary of State John Kerry visited the country, representing the first U.S. secretary of state visit since 2005.

Ahead of Kerry’s visit, a delegation of Sri Lankan naval officers were on board the USS Carl Vinson aircraft carrier, underscoring the burgeoning naval relationship between the two countries and their move toward increased maritime security cooperation.

Sri Lanka will also have noticed that Japan, in its bid to counter China’s growing involvement in the Asian infrastructure market, announced a capital package of $110 billion dedicated to infrastructure development projects in Asia.

A significant part of the funds would be allocated to projects that will be executed in collaboration with the Asian Development Bank. Sri Lanka would certainly want a share of this.

Finally, in an interview with The Australian, Wickremesinghe also indicated his intent to restore relations with Australia by addressing the issue of asylum-seeker boats.

This new thrust in Sri Lankan foreign policy augurs well for India as it steps up its efforts toward building partnerships across the IOR. Sri Lanka’s proximity to these powers will help India’s aspirations for multilateral leadership in the Indian Ocean gather more mass.