While agreements promise economic recovery, concerns remain regarding their long-term implications for Sri Lanka’s sovereignty and economic independence.
Sri Lankan President Anura Kumara Dissanayake’s recent visit to India marks a significant step in the evolving relationship between the two neighboring countries. As his first official overseas trip since taking office in September, the visit highlights a clear commitment to enhancing economic ties with India while addressing ongoing concerns about China’s influence in Sri Lanka.
During his meeting with Indian Prime Minister Narendra Modi, Dissanayake expressed gratitude for India’s role in stabilizing Sri Lanka’s economy during its 2022 collapse and reiterated his vision for economic cooperation that prioritizes sustainable development and recovery.
The visit culminated in a joint statement outlining a wide range of collaborative initiatives, from energy partnerships to regional security cooperation. India’s decision to supply liquefied natural gas (LNG) to Sri Lanka and partner in renewable energy projects reflects an ongoing commitment to help Sri Lanka diversify its energy sources. A major announcement was the agreement to build an energy pipeline connecting the two countries, a project that will also involve the United Arab Emirates. This pipeline, alongside plans to establish Trincomalee as a regional energy hub, highlights India’s strategic interest in deepening its influence in the Indian Ocean region while addressing Sri Lanka’s critical energy needs.
Additionally, both countries emphasized the importance of resuming passenger ferry services and rehabilitating key infrastructure projects, such as the Kankesanthurai port, to enhance connectivity. India’s continued involvement in developing housing, transportation, and digital infrastructure aligns with its “Neighborhood First” policy and SAGAR (Security and Growth for All in the Region) initiative.
While the agreements and announcements signal opportunities for economic recovery and stronger bilateral ties, concerns remain regarding their long-term implications for Sri Lanka’s sovereignty and economic independence. Criticism has emerged domestically, most notably from the Frontline Socialist Party (FSP), a breakaway faction of the Janatha Vimukthi Peramuna, which forms the core of the ruling National People’s Power coalition. The FSP has argued that these deals could disproportionately favor India while undermining Sri Lanka’s local workforce, resources, and autonomy. These criticisms could dent the forward momentum of the Dissanayake administration, whose party had often criticized former President Ranil Wickremesinghe over its dealings with India.
In a statement, the FSP specifically raised alarm over the proposed development of Trincomalee into an Indian economic hub, which could result in the displacement of over 7,000 families. The allocation of large tracts of land to foreign projects and the prospect of resource exploration rights being handed over to Indian entities in regions like Mannar and Kuchchaveli have heightened fears that Sri Lanka’s natural wealth could be exploited at the expense of its people.
Another significant concern stems from the revival of the Economic and Technology Cooperation Agreement (ETCA), which Dissanayake had severely criticized in the past. The FSP argued that ETCA’s provisions for liberalizing trade in services would open Sri Lanka’s job market to an influx of Indian professionals, potentially displacing local workers. Given India’s large labor force, particularly in professions like medicine, where many local doctors remain unemployed, Sri Lanka’s ability to protect its skilled workforce could come under pressure. The FSP warned that this would not only affect highly trained professionals but also small-scale workers in industries like transportation, barbering, and street vending, as cheaper labor from India could overwhelm the local job market.
The energy sector, another key focus of the visit, also drew scrutiny. While India’s involvement in LNG supply, offshore wind power, and power grid interconnection could help address Sri Lanka’s immediate energy needs, critics argue that such partnerships could make Sri Lanka increasingly dependent on Indian energy infrastructure. The FSP highlighted Bangladesh’s experience with India, where energy agreements granted significant control to Indian conglomerates like the Adani Group, effectively reducing Bangladesh’s energy sovereignty. Similar fears are being echoed in Sri Lanka, particularly as energy partnerships often lack transparency regarding long-term costs and benefits.
These criticisms are further tied to broader geopolitical concerns. The FSP’s Wasantha Mudalige pointed to India’s long-term vision for regional dominance, citing the “Akhand Bharat” concept, which imagines a unified South Asia under Indian influence. According to Mudalige, India’s increasing economic and strategic role in Sri Lanka could lead to an erosion of political autonomy, reducing Sri Lanka to a satellite state. The presence of such sentiments reflects deep-seated anxieties within Sri Lankan society about maintaining national sovereignty while pursuing external partnerships.
Despite these concerns, Dissanayake’s visit also reflects a pragmatic approach to rebuilding the country’s economy following the devastating collapse of 2022. India’s financial support, which included $4 billion in aid for food, fuel, and medicines, played a crucial role in stabilizing Sri Lanka’s economy during its most challenging period. The agreements reached during Dissanayake’s first presidential visit to New Delhi aim to build on that foundation by encouraging investment-led partnerships, improving connectivity, and enhancing trade. India’s plan to promote INR-LKR trade settlements could provide much-needed relief to Sri Lanka’s foreign exchange reserves, while proposed capacity-building programs, such as training 1,500 civil servants over the next five years, represent efforts to strengthen local governance structures.
Balancing the benefits of these initiatives with the risks they pose remains a challenge for Dissanayake’s government. Critics argue that Sri Lanka must approach these partnerships cautiously to ensure that they align with the interests and aspirations of its people. While collaboration with India can offer economic opportunities, transparency, equitable resource sharing, and protection of domestic industries must remain priorities. Dissanayake’s leadership will be tested in navigating these agreements in a way that fosters recovery without compromising Sri Lanka’s sovereignty or local livelihoods.
The visit to India has undoubtedly set the stage for a new chapter in bilateral relations, but its success will depend on how these agreements are implemented and whether they truly benefit Sri Lanka’s people. As the country strives to rebuild, Dissanayake’s government must strike a careful balance — leveraging India’s support while safeguarding Sri Lanka’s independence, economy, and long-term stability
