By: Dr. Sarath Obeysekera

India has long been a dominant regional power in South Asia, using its economic, cultural and security influence to shape the policies of its smaller neighbors. Over the last decade, New Delhi has intensified its engagement with Sri Lanka through a combination of trade, investment, defence cooperation and people-to-people links. While this may create opportunities for growth and stability, it also raises questions about sovereignty and policy independence.

India’s Expanding Footprint

Indian companies have secured significant stakes in Sri Lankan infrastructure — from renewable energy projects in the north and east, to port operations, hotels, manufacturing, and technology parks. India has also moved to establish joint ventures in the Trincomalee oil tank farm, renewable energy projects in Mannar and Pooneryn, and other strategic locations. This activity, combined with diplomatic activism and high-level visits, reflects a deliberate push to consolidate India’s position in Sri Lanka amid competition from China.

Strategic Competition in the Indian Ocean

The growing Indian presence is closely linked to India’s concerns about Chinese investment, particularly at Colombo Port City, Hambantota Port, and other Belt and Road Initiative projects. To counterbalance Beijing, India is offering development credit lines, security assistance, and more favorable market access to Sri Lankan exports. While this creates a hedge against overdependence on China, it also risks turning Sri Lanka into an arena of great-power rivalry.

Implications for Sri Lankan Politics

Indian investment and diplomatic influence can affect Sri Lanka’s domestic policy choices in several ways:

• Policy Alignment: Increased Indian involvement may pressure Sri Lanka to adopt positions closer to India’s on regional and global issues, including defense and trade.
• Federalism and Devolution: New Delhi has historically advocated for devolution to the Northern and Eastern Provinces under the 13th Amendment. Expanded Indian leverage could revive this agenda, influencing domestic constitutional debates.
• Economic Dependence: Heavy reliance on Indian credit and investment may reduce Colombo’s bargaining power and ability to diversify partners.
• Party Politics: Political parties may reframe their foreign policy platforms — some promoting deeper Indian ties for investment and stability, others warning of erosion of sovereignty.

Navigating a Balanced Approach

Sri Lanka faces the challenge of harnessing Indian capital and technology while maintaining independence in policy-making. Clear investment guidelines, transparent procurement, and diversified foreign partnerships can help preserve sovereignty. Diplomatic skill will be required to avoid aligning too closely with any one power — India, China, or Western countries — and instead emphasize Sri Lanka’s role as a neutral hub in the Indian Ocean.

Conclusion

Indian expansionism need not be a zero-sum threat to Sri Lanka, but without strategic planning and bipartisan consensus it can reshape domestic politics and undermine sovereignty. A balanced, transparent approach to foreign investment and security cooperation will be essential for Sri Lanka to manage this growing influence.

Regards

Dr Sarath Obeysekera