India – Sri Lanka Relations in the 21st Century

[June 16, 2016; BCIS Auditorium, BMICH]

Dr. Ranjith Cabral, Director, Bandaranaike Centre for International Studies,

Dr. Harinda Vidanage, Director (Research), Bandaranaike Centre for International Studies,

Professor Sudharshan Seneviratne,

Other eminent speakers,

Distinguished Invitees,

Ladies and Gentlemen,

I thank you for inviting me to make the opening remarks at this important seminar.

Our two countries share links that go back more than two millennia, and these links serve as the bedrock of our modern bilateral ties. Yet, on occasions, they tend to make us focus on events of the past, rather than the potential of the future. I think it is important that even as we nurture the unique historical ties that bind us, we make a conscious effort to look at how we can march together towards our shared destiny.

It is evident that a new and transformative phase in our relations began last year. Four high level bilateral visits within 90 days of the formation of a new government in Sri Lanka last year heralded a new beginning. President Maithripala Sirisena paid a State Visit to India in February 2015, which was his very first overseas visit after assuming office. The next month, Prime Minister Shri Narendra Modi made a historic visit to Sri Lanka, the first stand alone bilateral visit to Sri Lanka by an Indian Prime Minister since 1987. In addition to these, there was also an exchange of visits between the Foreign Ministers of our two countries in the first three months of 2015. The high level exchanges continued during the year with Prime Minister Ranil Wickremesinghe visiting New Delhi in September 2015, his first official visit abroad after the January elections, and President Maithripala Sirisena and Prime Minister Modi meeting on the sidelines of the United Nations General Assembly in September 2015.

The momentum generated by these visits has continued this year. Our Foreign Secretary visited in January 2016. Our External Affairs Minister, Smt. Sushma Swaraj, visited Sri Lanka for the Joint Commission Meeting in February 2016, held after a gap of three years. Last month, President Sirisena visited New Delhi, Ujjain and Sanchi.

Sri Lanka is an integral part of Prime Minister Modi’s “Neighbourhood First” policy. “Neighbourhood First” recognizes that India’s growth is linked to the prosperity of its neighborhood. Prime Minister Modi has a vision of a neighbourhood where trade, investment, ideas and people move seamlessly across borders, and India will continue to work towards this lofty vision of promoting greater connectivity among SAARC countries. A key element of this vision is strengthening bilateral ties with Sri Lanka, and indeed other SAARC countries.

Economic ties are at the core of India’s renewed engagement with the world. Under our Prime Minister, there has been an intense focus on investments and growth, which is already paying dividends. Consider Foreign Direct Investments. With FDI of US$ 40 billion from April 2015 March 2016, India has emerged as a magnet for global investments, and this trend is accelerating. Just this month Amazon Chief Executive Jeff Bezos announced that his company would invest an additional $3 billion in India, boosting its committed investment in the country to over $5 billion. Driven by these and other large investments, India's e-commerce business is estimated to increase to $119 billion by 2020. Thanks to investments, Indian GDP is expanding at a healthy 7.6% per annum, making India the fastest growing major economy of the world. Latest estimates are that India's economic growth may cross the 8 percent-mark this fiscal year.

This should be very welcome news for a neighbouring economy, such as Sri Lanka’s. We hope that Sri Lankan businesses will take advantage of their proximity to India. I am happy that bilateral trade has remained buoyant, with two way trade at US$ 4.6 billion during 2015, of which Indian exports were around US$ 4 billion and Sri Lankan exports were around US$ 645 million. India is also among the top investors in Sri Lanka with cumulative investments of over US$ 1 billion since 2003. From the Sri Lankan side, companies like Brandix and MAS Holdings are large investors in India and are doing extremely well.

The cornerstone of our trade relations has been the India - Sri Lanka Free Trade Agreement (ISLFTA), which has now been in force for more than 15 years. Contrary to perception in certain quarters, both India and Sri Lanka have reaped tremendous benefits from the FTA. Consider these figures: in 1999, our total bilateral trade was a meager US$ 561 million, out of which Sri Lankan exports were just US$ 49 million. Fast forward to 2015. Last year, Sri Lanka exported US$ 645 million to India. Sri Lankan exports have, thus, increased nearly 13 times since the FTA was signed. Total bilateral trade has increased more than 8 times. This is a big achievement. Sri Lankan exports have used the FTA to enter Indian markets and nearly 60% of Sri Lankan exports take advantage of the FTA concessions. On the other hand, around 90% of Indian exports to Sri Lanka do not use the FTA concessions. Thus, it is obvious who has benefitted more from the FTA.

During his visit to India in September 2015, Prime Minister Ranil Wickremesinghe proposed concluding an Economic and Technology Cooperation Agreement (ETCA). We have welcomed this offer, and look forward to discussions on how to elevate our FTA to include areas such as investment, services and technology cooperation. I am aware that some in Sri Lanka have raised concerns about signing an ETCA with India, and I do believe that it is upto Sri Lankans themselves to decide on the contours of any agreement that they sign with a foreign country. However, I am happy that a genuine debate has now begun in Sri Lanka on the issue, rather than a one-sided presentation of misinformation by some.

Let me move on to another important facet of our close friendship, that of development partnership. India has committed over US$ 2.6 billion in development assistance to Sri Lanka, with over US$ 435 million in outright grants. This is an enormous contribution, and our projects cover areas like housing, de-mining, agriculture, education, health, livelihood support, fisheries, industry, handicrafts, culture, sports and connectivity. Our flagship housing project, which aims to construct 50,000 houses, is proceeding well with over 45,000 houses constructed till date. The third phase, to construct 4,000 houses in the Central and Uva Provinces through an innovative community-driven approach, was launched in the last week of April 2016. This project is being hailed as a benchmark for others. I encourage you to go and see these solid and sensible houses standing pretty in the countryside with their red tiled roofs!! These houses will provide shelter to generations of Sri Lankans and stand as testimony to the friendship between our two countries.

I am also happy to state that that H.E. President Sirisena and Prime Minister Shri Narendra Modi, through video conferencing, will be jointly inaugurating the newly renovated Duraiappah Stadium in Jaffna on June 18. The Stadium, named in honour of former Mayor of Jaffna, the Late Alfred Thambirajah Duraiappah, who was so brutally murdered, has been renovated by the Government of India at a cost of Rs. 145 million. The renovated Stadium will benefit more than 50,000 students from different schools and educational institutions in the Northern Province by providing modern infrastructure for sports and recreational activities. The International Day of Yoga 2016 will also be celebrated on the occasion, with the participation of thousands of Jaffna residents.

Our cultures have been interwoven in a unique tapestry since time immemorial. This finds reflection in the large number of Indian tourists who come to Sri Lanka to savour its breathtaking beauty. The increasing air connectivity between our two countries is a good reflection of this strong linkage. There are now 154 flights a week between Colombo and eight destinations in India, and India continues to be the largest source for tourists visiting Sri Lanka, accounting for almost one-fifth of all tourist arrivals. In recognition of this special bond between our countries, special measures were taken in 2015 to simplify issuance of Indian visas to Sri Lankan nationals. The High Commission of India launched a Festival of India in Sri Lanka in November 2015 with ‘Nrityarupa’, a scintillating dance medley from different parts of India performed in Colombo, Kandy and Galle. I want to highlight the theme of the Festival, which is "Sangam", a confluence of cultures of India and Sri Lanka. The logo of the Festival, which is a pictorial depiction of "Sangam" in Sinhala, Hindi and Tamil, is a manifestation of the symbiotic ties that bind us. The Festival of India is a celebration of our shared civilizational heritage and will further strengthen the close links between our peoples and cultures. Various events will be held as part of the Festival during 2016.

India and Sri Lanka continue to enjoy a strong defence partnership based on extensive training and close linkages between our Armed Forces. India is Sri Lanka’s largest partner in defence training. As a testimony to this close cooperation, India’s state of the art aircraft carrier INS Vikramaditya, visited Sri Lanka on a good will visit in January 2016, its maiden overseas port call since after being inducted into the Indian Navy two years ago.

Let me also briefly touch on the sensitive issue of fishermen of both countries crossing the International Maritime Boundary Line (IMBL). This is a humanitarian issue. It has livelihood implications and it is stemming from long standing socio-economic patterns of subsistence. As a long term measure, India is providing financial assistance to our fishermen to move to deep sea fishing but this is a process which will take some time. This issue was discussed during the Joint Commission meeting this February. We look forward to the visit of Hon. Mahinda Amaraweera, Minister of Fisheries and Aquatic Resources Development to India later this year to discuss solutions to this vexed issue.

India and Sri Lanka are closest neighbours in every sense. We all have dealt with issues of identities, inclusion, claims, dignity and opportunity for different sections of our societies. The need for national reconciliation in Sri Lanka through a political settlement of the ethnic issue has been reiterated by India at the highest levels. India's consistent position is in favour of a negotiated political settlement, which is acceptable to all communities within the framework of a united Sri Lanka. Government of Sri Lanka has commenced this journey by taking important and positive steps. India has an abiding interest in the security of Sri Lanka and remains committed to Sri Lanka’s unity, sovereignty and territorial integrity. India will continue to remain engaged with Sri Lanka and offer our support in a spirit of partnership and cooperation.

I have no doubt that as close neighbours whose destinies are linked, our bilateral partnership will continue to scale even greater heights.

Long live India-Sri Lanka friendship!

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