Jaishankar’s Sri Lanka visit: Dissanayake’s balancing act and India’s neighbourhood-first policy

India’s External Affairs Minister S Jaishankar concluded his one-day visit to the neighbouring island nation of Sri Lanka on October 4. His visit to Colombo comes in the backdrop of recently held presidential elections in Sri Lanka in September 2024, which saw the victory of left-leaning Marxist leader Anura Kumara Dissanayake, alias AKD. Jaishankar became the first high-level foreign delegate to meet newly elected President Dissanayake. The minister congratulated him and conveyed New Delhi’s commitment to “moving forward with the strong bilateral partnership” with Colombo.

This may be one of the key instances where India, under Modi 3.0, has taken a proactive stance to engage with a strategically located island nation in the Indian Ocean, 33 km off the Indian coast. Noteworthy, Indian Prime Minister Narendra Modi quickly congratulated the President-elect Anura Kumara Dissanayake and his party, adding, “Sri Lanka holds a special place in India’s Neighbourhood First Policy and Vision SAGAR.” It was promptly acknowledged by President-elect Dissanayake: “Thank you, Prime Minister Modi, for your kind words and support.” He added that he shared PM Modi’s ‘commitment to strengthening the ties between the nations’. And that together, they can work towards enhancing cooperation for the benefit of their people and the entire region.

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India’s Comeback in 2022

Since the 2022 economic crisis in Sri Lanka, India has made a comfortable landing in Sri Lanka through its financial assistance worth $ 4 billion towards humanitarian, medical, fuel, loan deferments, and currency swaps. India’s support during this turbulent time has enabled it to re-establish itself as a reliable partner and an influential player in Sri Lanka’s recovery and regional dynamics.

Post-Rajapaksas, India managed to strike a delicate balance with former president Ranil Wickremesinghe, effectively voicing its concerns over the docking of Chinese spy ships along Sri Lanka’s coast and Beijing’s opaque investments in infrastructure projects, including the highly scrutinised Colombo Port City development.

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As a result of India’s financial assistance, a crucial change in the past two years favouring India in Sri Lanka has been a turnaround in public perception towards New Delhi. India’s recent past in the island nation was first marred by the 1987-1990 episode of the controversial Indian Peacekeeping Force (IPKF) intervention, followed by Delhi’s support to the Liberation Tigers of Tamil Eelam (LTTE)—a militant organisation that sought an independent Tamil state in northern and eastern Sri Lanka.

A Pro-China President?

Soon after the election results were announced on September 22, due to President Dissanayake’s Marxist and left-leaning political ideology, the media tagged him as a natural partner of China. This media narrative was reminiscent of the coverage when a Maoist government was formed in Nepal in 2008, which similarly saw an ideological alignment with Beijing. In both cases, the leaders’ political leanings, rooted in socialist and communist ideals, were seen as conducive to fostering closer ties with China. However, India is certainly not buying the media narrative.

Interestingly, President Anura Kumara Dissanayake seems to be carefully treading the foreign policy by projecting a balanced approach towards India and China. He appears to be in no rush to court China, as India remains a critical financial partner in the ongoing economic reforms.

Meanwhile, the close party-level ties between Dissanayake’s National People’s Power (NPP) and China’s Communist Party, which stem from shared ideological foundations, continue to develop. In April this year, a delegation of the Chinese Communist Party met Dissanayake and local party leaders of the NPP, signalling the potential for deeper engagement. Yet, despite these ties, the Sri Lankan leadership seems intent on maintaining a pragmatic and balanced foreign policy.

Delhi’s Challenges Ahead

The foremost challenge facing India would be to ensure the continuation of the progress made in bilateral relations in the past three years. Considering Sri Lanka needs India’s support in the IMF debt structuring, Delhi’s outreach with the current administration might be further boosted. In addition, India has offered to “modernise the Kankesanthurai port through a grant to the tune of $61.5 million”. And agreed that “payments for 7 completed Line of Credit projects to the tune of $20 million could be converted into grants. India has also decided to gift 22 diesel locomotives to the Sri Lankan Railways”. These initiatives reflect India’s commitment to strengthening ties and supporting Sri Lanka’s economic recovery.

What might play a spoiler is President AKD’s political positioning against awarding a major wind energy project to India’s Adani Group by his predecessor Ranil Wickremesinghe. The project aims to develop a major 484 megawatts of wind power in Mannar and Pooneryn in the war-ravaged region, where the group is expected to invest $440 million in a 20-year-long agreement. The agreement became a hot topic during the presidential campaign.

While Dissanayake may have his reservations about the deal given to the Adani Group, India is likely to continue pursuing this investment, emphasising the importance of economic cooperation in the region.

Also, India has historically emphasised its “support for the aspirations of all communities, including Tamils, for equality, justice, dignity, and peace while maintaining the unity, territorial integrity, and sovereignty of Sri Lanka”. In this regard, India may want “the full and effective implementation of the 13th Amendment of the Sri Lankan Constitution and the early holding of Provincial Council elections”.

India’s push for the 13th Amendment, which devolves certain powers to provincial councils, may create an irritant due to opposition from nationalist factions who view it as a threat to the centralised authority of the Sri Lankan government. However, even if the 13th Amendment holds sentimental value for India due to its ethnic ties with the Tamil community, it will not hinder its pursuit of overall relations with Sri Lanka. New Delhi recognises the importance of maintaining a balanced approach, ensuring that support for Tamil rights does not compromise broader diplomatic and economic ties with Colombo.

Lastly, India would want the current political dispensation in Sri Lanka to be mindful of New Delhi’s sensitivities while engaging with a third country, especially China. Undoubtedly, China is focused on sustaining momentum in its strategic cooperation with Sri Lanka, especially in the maritime domain, and it will be interesting to see how Beijing leverages Colombo’s existing debt with China as a pressure point. Since Sri Lanka’s largest creditor is China, the dynamics of this relationship will be particularly significant.

To conclude, given that President Dissanayake has hardly completed two weeks in office, it will be too early to predict his foreign policy outlook. Still, learning from his past engagements with India and China in his political capacity, his presidency could herald a similar balancing act. He is likely to avoid skewing Sri Lanka’s foreign policy in favour of China at the expense of India, aiming for a more nuanced approach that fosters cooperation with both countries. Meanwhile, President Dissanayake’s visit to India will be a catalyst in defining the future course of the bilateral ties.

Rishi Gupta is the Assistant Director at the Asia Society Policy Institute, Delhi. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.