Analysis of the Joint Statement of India – Sri Lanka (16 December, 2024)

Analysis of the Joint Statement of India – Sri Lanka (16 December, 2024)

Part - 1 

Newly elected President of Sri Lanka Anura Kumara Dissanayaka was in India in a three days state visit (15-17 December, 2024). On Monday, 16th December, 2024, Mr. Dissanayaka met with Prime Minister of India, Mr. N. Modi. In this context, the two countries released a joint statement. The statement included a wide range of strategic issues. This article analyzed the statement to understand India-Sri Lanka relations.

India provided an unparalleled and multi-pronged support during 2022 Sri Lanka economic crisis. During that period, India extended financial and forex support worth USD 4 billion. India also assisted Sri Lanka in its debt restructuring process. India also extended financial assistance of USD 20.66 million to settle payments due from Sri Lanka for projects completed under existing Lines of Credit, which significantly reduced debt burden of Sri Lanka. This created a strong bonding between the two countries. Political and strategic intimacy between the two countries had become clear when Mr. Dissanayaka, the newly elected President of Sri Lanka, chose to visit India as his first foreign tour as President. In the statement, President Dissanayaka appreciated India’s unwavering support to the people of Sri Lanka during and after the unprecedented economic crisis in 2022.

The statement provided major emphasis on economic perspective. Issues, for example, debt restructure, energy security etc. had been given special attention. The statement also included affirmation of both the leaders, to shift from debt-driven models to investment led partnerships across different sectors, which will ultimately ensure a more sustainable path to economic recovery, development and prosperity in Sri Lanka.

Both the leaders, reaffirming strong bilateral relation between the two countries, which is enrooted in the cultural and civilizational ties, geographical proximity and people-to-people relations. To deepen the ties, both the leaders agreed to intensify political engagements at leadership and ministerial levels. They also underscored the importance of regular parliamentary level exchanges to ‘promote democratic values and shared expertise on their institutional best practices’.

India is already engaged in various development projects in Sri Lanka. During their discussion, both the leaders decided to complete those ongoing projects on time, such as, Indian Housing Project Phase III and IV, three Island Hybrid Renewable Energy Project and High Impact Community Development Projects across Sri Lanka etc. They also agreed to identify new areas of cooperation for development partnership, keeping in mind the needs and priorities of the Government of Sri Lanka.

Both India and Sri Lanka acknowledged the importance of energy security, which includes continuous flow of affordable energy resources to meet the basic needs of the people. In this regard, the leaders agreed to take steps towards the implementation of the solar power project in Sampur. They also agreed to further augmentation of its capacity as per Sri Lanka’s requirements. They also discussed several other energy security related proposals, for example, supply of LNG from India to Sri Lanka, establishment of an interconnected high-capacity power grid between the two countries, joint cooperation among India, Sri Lanka and UAE to implement a multi-product pipeline from India to Sri Lanka to supply affordable and reliable energy. They also agreed to develop offshore wind power potential in Palk Straits, while prioritizing environmental protection, including fauna and flora. They also acknowledged the ongoing cooperation in the development of Trincomalee Tank Farms. The leaders also decided to support the development of Trincomalee as a regional energy and industrial hub.

Both Prime Minister Modi and President Dissnayaka appreciated that the India- Sri Lanka Free Trade Agreement (ISFTA) has enhanced the trade partnership between the two countries. Considering the pace of economic growth and opportunities in India and the growing market size and trade and investment potentiality of Sri Lanka, the leaders agreed to enhance trade partnership in diverse areas. They agreed to continue discussion on the Economic and Technological Cooperation Agreement, to enhance INR-LKR trade settlements between the two countries, encourage investments in key sectors of Sri Lanka to accelerate its export potential. The leaders also emphasized to finalize the proposed bilateral Social Security Agreement.

India also agreed to train 1500 Sri Lankan civil servants across ministries and departments over a period of five years, through the National Centre for Good Governance in India.

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