Sri Lankan President Ranil Wickremesinghe’s maiden visit to New Delhi last week (July 21) marked a significant turning point in the realms of connectivity, trade, investment, and the energy sector for India and Sri Lanka. During his visit, fruitful discussions were held, establishing stronger ties and cooperation between the two nations. The energy sector was another key focus area during the bilateral meeting.
During Wickremesinghe’s visit, the two neighbours agreed to cooperate in developing renewable energy. A high-capacity power grid interconnection between the two countries will be set up to enable bidirectional electricity trade between Sri Lanka and other regional countries, including the BBIN ((Bangladesh, Bhutan, India, and Nepal) countries.
This grid connection has two significant goals: reducing electricity costs and establishing a reliable foreign exchange source for the island nation. Last week, two sides discussed the Sampur Solar power project and LNG infrastructure. The two countries will cooperate deeply in green hydrogen and renewable energy generation.
The ferry service remains a major issue between the two neighbours. Both sides discussed the resumption of passenger ferry services between Nagapattinam in India and Kankesanthurai in Sri Lanka, as well as between Rameshwaram and Talaimannar and other locations. Once the ferry service is resumed, it will strengthen bilateral ties and people-to-people contact and boost trade between the two countries.
Sri Lanka experienced an unparalleled financial crisis last year. It was the worst economic crisis since independence in 1948. A significant shortage of foreign exchange reserves mainly caused the economic crisis. Sri Lanka declared its first-ever credit default in 2022. About a few months ago, Colombo secured a bailout of $2.9 billion from the IMF with support from India. India extended its support to Sri Lanka, contacting the International Monetary Fund (IMF) and the World Bank for financial support. Conversely, India, China, and Japan have lent the most money to Sri Lanka to eliminate the economic crisis.
India and Sri Lanka are earnestly seeking to strengthen the bond between them. As a result, new flight services are being readied. During de-dollarization, Sri Lanka made a significant step by accepting the use of Indian currency, the rupee, for bilateral trade transactions. This move aimed to strengthen economic ties and promote a more sustainable financial ecosystem between Sri Lanka and India. Following this development, the dependency on the dollar will be reduced.
India and Sri Lanka are considering the establishment of a multi-product pipeline that would connect Trincomalee in Sri Lanka with Indian territory. This pipeline project aims to facilitate the efficient transportation of various products between the two nations, enhancing trade and fostering closer economic cooperation.
Ranil Wickremesinghe’s India visit holds significant importance and is expected to elevate bilateral relations to new heights. Wickremesinghe will most likely visit China later this year. Despite China’s exploitation of Sri Lanka, President Ranil Wickremesinghe chooses not to confront China directly or irk China for fear of potential economic repercussions.
However, Sri Lanka has learnt a poignant lesson from its dealings with China, which has left a bitter aftertaste. Henceforth, Colombo is steadfast in its commitment to never compromise on national security and interest matters.
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