Bridge This Deficit Between India And Sri Lanka

Relevance: GS2 - India and its neighborhood- relations. Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests. GS3 - Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

(Source: The Hindu, 12/11/2023)

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Why in the news?

• Recently, Sri Lankan President Ranil Wickremesinghe announced a proposal to establish land connectivity between India and Sri Lanka with the goal of regional integration.
• The article also discusses other aspects of the bilateral relationship such as energy and trade.
• India has recently become the largest source of imports and tourists to Sri Lanka.

What was the proposal for regional connectivity?

• In 2003, then Prime Minister and present President of Sri Lanka, Ranil Wickremesinghe proposed to build a bridge linking Rameswaram in Tamil Nadu with Talaimanar in the Northern Province of Sri Lanka.
• The proposal was part of a larger vision of regional economic integration encompassing his country and the southern States of India and aimed at generating more opportunities for economic growth.
• The project was mentioned in a joint statement, as per which a feasibility study would be conducted, following the meeting between the Sri Lankan President and the Indian Prime Minister in New Delhi in July 2023.
• Mr. Wickremesinghe, who also holds the Finance Portfolio, claimed that the connectivity project would help Sri Lankan ports meet the supply needs of India’s south coasts.
• Colombo port would meet the supply requirements of South West India
• Trincomalee port would meet the supply needs of South East India.

Opposition

• However, the project has faced opposition from Sinhalese-Buddhist groups who claimed that the project would not be beneficial for Sri Lanka.
• In December 2015, Sri Lanka adopted a muted response to a statement by the Union Minister of Road Transport and Highways in the Lok Sabha about the Asian Development Bank’s willingness to fund the project.
  • The project was estimated to cost around ₹24,000 crores and was strongly opposed by critics.

What was the proposed power grid project between India and Sri Lanka?

• In 1970, a proposal was launched to connect the electricity networks of the two countries.
• In 2010, India and Sri Lanka signed a memorandum of understanding on the bilateral grid.
• However, the project has still not been implemented successfully.
• Sri Lanka and Bangladesh also signed a memorandum of understanding with India in 2010 for collaboration in the power sector.
• Projects involving Indian participation in the energy sector, particularly renewable energy are being taken up in the island nation.
• The transmission network project which aims to transfer 1,000 MW and the High Voltage Direct Current overhead link between Madurai (India) and New Habarana (Sri Lanka) has not been properly implemented.
• If the facility had been in place in 2022, Sri Lanka would not have suffered power cuts and blackouts during the economic crisis.
• The success of the project could help India obtain cheaper power from Sri Lanka and ensure the deadline of 2030 (Sri Lanka aims to generate 70% of its electricity requirements from renewable sources by 2030 and attain independence in power supply by 2050.)
• Challenges: Sri Lanka has had to recover from the 25-year-long protracted civil war in the country, which has proved to be the major factor prohibiting developmental activities.

Comparison with Bangladesh

• India has been exporting at least 7,000 million units (MU) per annum to Bangladesh for the last couple of years.
• Earlier this year, PM Narendra Modi and PM Sheikh Hasina jointly commissioned the second unit of the Rampal Maitree Power Project (660 megawatts) and launched two other infrastructure projects.

Trade between India and Sri Lanka

• In December 1998, India and Sri Lanka signed the India-Sri Lanka Free Trade Agreement.
• Negotiations resumed in December 2023 as the two countries have not been able to advance further despite holding talks regularly.
• Bilateral economic ties between the two countries have improved in recent years.
• In 2022, India regained its status as the largest source of imports to Sri Lanka (26% of the total imports).
• However, certain imports were through credit lines offered by India in the wake of the economic crisis.
• India is also the largest single source of tourist arrivals to Sri Lanka with over 17% of the overall number of arrivals.
• However, experts claim that there is a much greater potential for bilateral trade between India and Sri Lanka.
• In comparison, India’s bilateral trade with Bangladesh has been much more robust.
• India-Sri Lanka bilateral trade in 2021 was $5.45 billion while bilateral trade between India and Bangladesh was $18.14 billion in the same period.

Way forward

• Sri Lanka must emulate Bangladesh’s example in building a mutually beneficial relationship with India despite the presence of anti-Indian nationalist forces in the political class.
• Recent developments in the India-Sri Lanka relationship should be sustained and improved upon. These include the
  • resumption of air services between Chennai and Jaffna
  • launch of passenger ferry services between Nagapattinam and Kankesanthurai
  • joint venture agreement between India’s National Dairy Development Board, the Gujarat Cooperative Milk Marketing Federation, and Cargills of Sri Lanka for self-sufficiency in the dairy sector.
• A strong relationship with India would help Sri Lanka ensure that its economy can return to a high standard of living and stability.

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FAQs

MCQs

Question: Consider the following statements: (UPSC 2020)

1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.
2. “Textile and textile articles” constitute an important item of the trade between India and Bangladesh.
3. In the last five years, Nepal has been the largest trading partner of India in South Asia.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 only

(c) 3 only

(d) 1, 2 and 3