India-Sri Lanka Roadmap

In News

Recently, Sri Lanka sought to reset relations with India.

About

• With a new High Commissioner and strategy roadmap in Sri Lanka, the country seeks to revisit and change the equation of relations with India. 

Recent Developments

• High Commissioner: 
  • After months of strain over a number of issues including the cancelled port project in Colombo, Sri Lanka is preparing to send its High Commissioner-designate to Delhi.
  • The reset in ties is expected to be marked by the arrival of Mr Moragoda, a former Cabinet Minister, in mid-August. His predecessor High Commissioner Austin Fernando completed his term and returned to Colombo on January 11, 2020, which makes this the longest period the position has remained vacant, even though Mr Moragoda’s appointment was announced in August 2020.
• Roadmap: 
  • A ‘roadmap’ to restore ties has also been made that includes:
    • resolving fishermen’s issues, 
    • building connectivity, 
    • trade and investment,
    • Promoting religious links, 
      • Buddhist exchanges 
      • handing over a sacred “Sita temple stone” from Sri Lanka for the proposed Ram temple in Ayodhya.
  • The roadmap will help bridge the “growing trust deficit”.
  • The strategy is silent on the Economic and Technology Cooperation Agreement (ETCA), negotiations for which appear deadlocked.

• India’s Issue: 
  • India expressed its unhappiness over Sri Lanka’s decision to scrap the East Container Terminal project signed in 2019, amidst other signs that China was gaining the upper hand in infrastructure deals in the country.
• Transactional approach:
  • In recent years, the Indo-Sri Lanka bilateral relationship has been increasingly dominated by a transactional approach. This is a consequence of the changes in the geopolitical equilibrium in the region that has resulted in a growing trust deficit.
• India extended a $100 mn loan to Sri Lanka
  • India and Sri Lanka signed an agreement for a $100-million loan from the Export-Import Bank of India to support the island nation’s efforts to expand solar power coverage.
  • This line of credit will help finance various projects in Sri Lanka’s solar energy sector, including those announced at the founding conference of the International Solar Alliance (ISA) such as rooftop solar photovoltaic systems for households and government buildings.

East Container Terminal (ECT) Project

• In May 2019, the state-run Sri Lanka Ports Authority (SLPA) inked a memorandum of Cooperation (MoC) with Sri Lanka, India and Japan to develop the East Container Terminal (ECT)

Image Courtesy: maritime gateways

• The three countries agreed that SLPA would retain 100% ownership, while a jointly-owned Terminal Operations company would run the terminal– 51% stake with Sri Lanka and 49% with India and Japan. 
• In Feb 2021, Sri Lanka booted India and Japan out of a 2019 deal to jointly develop the East Container Terminal (ECT) at the Colombo Port, as trade unions and sections of the Buddhist clergy vehemently opposed foreign involvement in the strategic national asset.
• Both India and Japan expressed displeasure at the Sri Lankan government’s unilateral decision, reneging on a tripartite agreement.
• As an alternative, Sri Lanka offered the West Container Terminal (WCT) at the Port to India and Japan for joint development on new terms, with higher stakes of 85 % for the foreign partners.
• In March 2021, the government approved a joint venture with the Adani consortium to develop the WCT, on a Build-Operate-Transfer basis for 35 years. But even this Project has not been smooth sailing.
• Are the ECT and WCT deals similar?
  • The Colombo Port has five terminals at present — South Asia Gateway Terminal (SAGT), Jaya International Terminal (JCT), Colombo International Container Terminal (CICT), Unity Container Terminal, and the ECT. The proposed WCT is to come up at the Port’s western end.
  • Although both the ECT and the WCT are located in the same Port, there are crucial differences in their proposed development.

Image Courtesy: Lanka business

Way Forward

• Sri Lanka needs to speed up the West Container Terminal project that Sri Lanka offered after cancelling the ECT project, as well as the Trincomalee Oil Tank Farm and other pending projects.
• An inter-Agency Committee on Trade, Investment and Tourism should be established to reach Foreign Direct Investment (FDI) goals of $256 million from India in 2022.
• Promote exchanges of Buddhist and Hindu scholars as well as Sri Lankan Catholic pilgrims to the “Velankanni trail” in Tamil Nadu. In particular, it speaks of handing over a sacred stone from the Sita Amman temple in Sri Lanka for the Ram Temple planned in Ayodhya.
• Top Sri Lankan diplomats should engage directly with the government and fisheries associations in Tamil Nadu.
• Proposals to enhance connectivity have to include resuming passenger ferry services and more air connectivity and new destinations for Sri Lankan flights. 

Source: TH