NEW DELHI (AP) — Sri Lanka and India on Friday signed a series of energy, development and trade agreements, signaling growing economic ties between neighboring countries.
Sri Lankan President Ranil Wickremesinghe arrived in New Delhi a day early for the official visit, his first since taking the top job last year after an economic meltdown forced his predecessor to flee.
On Friday, he held talks with Indian Prime Minister Narendra Modi and the two leaders unveiled agreements on technology, renewable energy and increased connectivity to deepen bilateral relations between India and Sri Lanka.
“My visit to India provided an opportunity to review our bilateral relationship, harnessing the power of geographic and civilizational ties, strengthening trust and confidence for our future prosperity in the modern world,” said Wickremesinghe.
Modi said the two leaders have adopted a vision to boost their economic cooperation, which includes strengthening maritime, air and energy connectivity between their citizens and accelerating mutual cooperation in tourism, trade and higher education.
“The past year has been full of challenges for the people of Sri Lanka. As a good friend, as always, we stand shoulder to shoulder with the people of Sri Lanka,” Modi said in his remarks.
Relations between the two countries improved greatly last year as Sri Lanka was mired in its worst economic crisis in modern history, triggered by a severe currency crisis that left essential items running out and citizens queuing for days for fuel. It also suspended service of foreign debt last year.
India provided critical financial and humanitarian aid worth more than $4 billion to its neighbor, including food, medicine and fuel, aimed at instilling much-needed stability as its bankrupt neighbor struggled with an outstanding total debt of more than $83 billion, of which $41.5 billion was foreign.
It was also the first creditor to issue a letter of support for Sri Lanka’s debt restructuring efforts, helping to kick-start support from the IMF, which approved a $3 billion bailout package in March.
The visit is “a clear signal that India’s support over the past year is appreciated,” said Constantino Xavier, a fellow at the Center for Social and Economic Progress. It shows that India “will be the most important partner for Sri Lanka to reset its economy, bureaucracy and decision-making systems for future economic partnerships,” he added. “This visit marks a new chapter in that sense.”
Sri Lanka’s strategic location in the Indian Ocean has long drawn the attention of regional rivals India and China. For years, free-flowing loans and infrastructure investment from Beijing helped it gain the upper hand against New Delhi in its quest for influence.
But the economic collapse gave New Delhi a chance to swing the pendulum back in its favor, especially as China delayed its support for debt relief, experts say. China owns about 10% of Sri Lanka’s external debt.
Modi and Wickremesinghe hailed the energy and infrastructure trading opportunities as a nod to growing ties. That included the potential for a petroleum pipeline from South India to Sri Lanka and the development of Trincomalee, a northeastern coastal city in Sri Lanka, into an industrial hub.
“We see an increasing form of competition, sometimes even conflict, between India and China in countries like Sri Lanka, where they often compete for the same projects in infrastructure, energy and even political influence in Sri Lanka,” said Xavier.
The two leaders also expressed support for the full implementation of an Indian-backed plan to share power with Sri Lanka’s ethnic minority Tamil population in the northern and eastern provinces of the island. The minority has linguistic and cultural ties to the Tamils of South India.
A civil war between the Sinhala-controlled government of Sri Lanka and ethnic Tamil rebels claimed the lives of at least 100,000 people before ending with the defeat of the rebels in 2009, according to conservative UN estimates.
“We hope that the Sri Lankan government will fulfill the aspirations of the Tamils,” Modi said.
Wickremesinghe said he has presented Modi with a proposal for reconciliation and power-sharing, and said he has urged his parliament to reach a consensus and resolve the long-running conflict. His delegation also included two Sri Lankan Tamil ministers.
Sri Lankan governments have promised India over the years that they will share more power with the Tamils to ensure peace and fully implement the 13th Amendment, which created provincial councils with some degree of devolved powers. But they have not so far, much to the dismay of Tamil political leaders in Sri Lanka and India alike.
“India needs to pressure Wickremesinghe and the opposition to be sincere and solve the problem,” said Jehan Perera, a political analyst in Colombo.
The economy has shown signs of improvement since Wickremesinghe took office as president last year. The shortages have been rectified, the power cuts have ended and the rupee is starting to strengthen. But he is struggling to get the support of the opposition parties he needs to move forward on a power-sharing deal.
“So much money can come from the Tamil diaspora if we solve this problem – many Tamils in the diaspora are willing to help if Sri Lanka treats its Tamil people fairly,” added Perera.
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Mallawarachi reported from Colombo, Sri Lanka.
