Even as Sri Lankan President Anura Kumara Dissanayake had been on a four-day visit to China between January 14 and 17, 2025 and the two countries inked around 15 pacts and reinforced its focus on economic and technological development… it may be recalled how Sri Lanka's economic dependence on Beijing has already led to a "debt-trap" situation for the island country.
It may be recalled how in October 2023, when scientists from Sri Lanka and China had conducted joint research onboard Chinese vessels.
Despite concerns from India and the US, Sri Lanka granted the nod, however, later Sri Lanka had imposed a one-year moratorium on allowing foreign research vessels to operate in its waters. This move was aimed to prevent potential diplomatic conflicts and also to avoid geopolitical issues.
Now, India is stepping up its presence in Sri Lanka to counter Beijing’s growing influence after it launched key energy and defence projects in partnership with the UAE.
During Prime Minister Narendra Modi’s recent visit to Colombo, India, the UAE, and Sri Lanka inked a major pact to develop an energy hub in Trincomalee, a strategic port city on Sri Lanka’s eastern coast. The move is seen as a direct response to China’s $3.2 billion oil refinery deal in Hambantota.
Importance of Trincomalee
The real time scenario also holds importance given China's bid to hold more power in the Indian Ocean Region. Also, Bangladesh Chief Advisor Mohammed Yunus’ recent plea asking China to increase its arms to Bangladesh has been enough reason for India to
worry.
Meanwhile, PM Modi has promised Dissanayaka full support in rebuilding as Sri Lanka continues to battle a crippling economy. The trilateral project in Trincomalee is significant to New Delhi’s efforts to beef up its presence in the country especially at a time when China continues to enhance influence through large-scale infrastructure projects.
"Sri Lanka has a special place in both our Neighbourhood First Policy and Vision 'MAHASAGAR'. In the last four months, since President Disanayaka's visit to India, we have made significant progress in our cooperation," PM Modi had said.
Growing Presence
India’s growing presence in Sri Lanka comes as Colombo tries to recover from a severe financial crisis. India was the first country to step in with a $4 billion support. New Delhi has also helped Sri Lanka finalise a debt restructuring process involving loans worth $1.36 billion from Indian banks.
Defence Deal
India and Sri Lanka signed a landmark defence cooperation agreement and later President Dissanayake said, “Sri Lanka will not allow its territory to be used in any manner that could threaten India’s security interests.”
The defence pact is widely seen as part of India’s larger effort to push back against China’s growing footprint in the Indian Ocean Region. China already controls the Hambantota Port on a 99-year lease, raising enough concerns for New Delhi.
By strengthening economic, energy and defence ties, India is making it clear that it intends to remain Sri Lanka’s closest and most reliable partner — and attempting to limit China’s influence.
Importance of
Katchatheevu
Katchatheevu, the 1.15-square-kilometre uninhabited island located in the Palk Strait between India and Sri Lanka keeps haunting the political discourse.
At a time when China is looking to expand its presence, Katchatheevu assumes great strategic significance for India.
India, Lanka claims
Historically, Katchatheevu belonged to the Ramnad Zamindari, which was established in 1605 by the Nayak dynasty of Madurai. It consisted of 69 coastal villages and 11 islets, including Katchatheevu.
Katchatheevu was a source of revenue for the Sethupathi dynasty as it leased the island first to the Dutch in 1767 and to the British East India Company in 1822.
This is how India has a historical claim to the barren island.
In its counterclaim, Sri Lanka says that the Catholic Church on the island comes under the Jaffna Diocese. That was the basis of the Sri Lankan claim on Katchatheevu.
However, after India’s Independence, Prime Minister Jawaharlal Nehru did not give much importance to the island and was of the opinion that the issue would lead to an unnecessary dispute with Sri Lanka, according to the External Affairs Minister S Jaishankar.
While the ‘Indo-Sri Lankan Maritime Boundary Agreement of 1974' gave away the island to Sri Lanka, Indian fishermen were still allowed to access Katchatheevu.
Two years later, in 1976, the maritime boundary line in the Sethusamudram region between the two neighbors was divided, ending the Indian fishermen's visits to the island.
Katchatheevu and the adjoining seas fell within the jurisdiction of Sri Lanka.
Threat of China
There is always the fear that China could gain a foothold closer to India because of Katchatheevu and Hambantota is testimony of that following the vulnerability of Sri Lanka and its economic condition.
Of late, India has attached a great deal of significance to the islands in the IOR.
With the rise in Beijing’s ambition over the last decade, China’s potential hold in Katchatheevu and the entire Palk Strait is also being feared.
"The Indian Ministry of Defence must strengthen INS Parundu naval air base at Uchipuli and Thanjavur Air Force (Tamil Nadu) to thwart the growing Chinese presence near the Sri Lankan island of Katchatheevu and Northern Province of Sri Lanka," said a 2020 paper 'China's Rising Missile and Naval Capabilities in the Indo-Pacific Region' in the Journal of Indo-Pacific Affairs of the American Air and Space Forces.
(Writer is Senior Journalist and Former Senior Associate Editor, O Heraldo, Goa.)