This is Modi’s third visit to Sri Lanka in the last four years. Earlier, he visited the country in March 2015 and in May 2017. President Maithripala Sirisena will be present at the full ceremonial welcome with a 21-gun salute that will be accorded to the Indian leader. The President will host a lunch in Modi’s honour. It will be attended by the entire Sri Lankan cabinet, Leader of the Opposition Mahinda Rajapaksa, Tamil National Alliance (TNA) Chief Rajavarothiam Sampanthan, other TNA leaders and representatives of the 14,000-strong Indian expatriate community.
The visit to the Maldives on Saturday and to Sri Lanka on Sunday is Modi’s first after he was sworn in for a second five-year term on May 30. It re-emphasizes his government’s ‘Neighbours First’ foreign policy. His new External Affairs Minister Dr Subrahmanyam Jaishankar is currently visiting Bhutan as a part of this policy.
India’s civilizational links with Sri Lanka are 2,600 years old. Both neighbours enjoy a vibrant and growing economic and commercial partnership, with bilateral trade growing rapidly in the last decade and a number of leading Indian private sector companies investing in Sri Lanka and establishing a presence in the country.
Sri Lanka is one of India’s largest trading partners in SAARC. India is Sri Lanka’s largest trade partner globally. Bilateral trade between India and Sri Lanka amounted to US$ 4,930 million in 2018. In addition to being Sri Lanka’s largest trading partner, India is also one of the largest contributors to Foreign Direct Investment (FDI) in Sri Lanka. Cumulative Indian investments now stand at $1,239 million.
Investments by Sri Lankan companies in India are also surging, taking advantage of India’s dynamic economy and wider market. Significant examples include Brandix (about US$ 1,000 million to set up a garment city in Visakhapatnam, Andhra Pradesh), MAS holdings, Damro, LTL Holdings, apart from other investments in the freight servicing and logistics sector.
India sends to Sri Lanka more tourists than any other country. Last year, 4,24,887 Indian tourists enjoyed a holiday in the emerald island, while 1,20,925 Sri Lankans visited India.
To enhance connectivity between the two nations India and Sri Lanka entered into an Open Sky Agreement enabling SriLankan Airlines to operate unlimited number of flights to six Indian metro airports. SriLankan is also the largest foreign carrier in India operating 118 flights per week to 12 destinations in India.
At least one thousand Indians and Sri Lankans fly between New Delhi and Colombo every day. There are healthy linkages between the business chambers of the two countries. Various Indian Chambers have signed MOU’s with Sri Lankan Chambers to promote trade and economic relations, investments between India and Sri-Lanka. Indian Chambers also participate extensively in the various trade fairs organized in Sri Lanka.
Sri Lanka is among the major recipients of development assistance from India. India’s overall commitment stands close to $ 3,000 million, out of which around $ 560 million is purely in grants.
The Indian Housing Project, with an initial commitment to build 50,000 houses for the war-affected as well as the estate workers in the plantation areas, is India’s flagship project of developmental assistance to Sri Lanka.
With an overall commitment of over INR 13.72 billion in grants, it is one of the largest projects undertaken by India abroad. As of today, all the committed 46,000 houses in the Northern and Eastern Provinces have been completed.
Out of the remaining 4,000 houses under construction in the Central and Uva Provinces meant for estate workers through an innovative community-driven approach, close to 1,000 houses have been completed.
When the first lot of these houses built in the plantation areas was handed over in a ceremony attended by Prime Minister Ranil Wickremesinghe in August 2018, in which Prime Minister Narendra Modi joined through video message, India and Sri Lanka also signed an agreement to commence construction of 10,000 additional houses, which were announced by Prime Minister Narendra Modi during his last visit to Sri Lanka in May 2017 at a projected cost of INR 4.85 billion. With this India’s total commitment to build houses in Sri Lanka stands at 60,000.
Besides housing, India continues to assist in a large number of High Impact Community Development Projects in areas of education, health, transport connectivity, small and medium enterprise development and training across the country under grant assistance.
Completed projects during 2018 include provision of livelihood assistance to nearly 70,000 people from fishing and farming community in Hambantota, supply of medical equipment to Vavuniya Hospital and 150 Boats and Fishing gear for Mullaithivu fishermen. A modern 1500-seat auditorium named after Rabindranath Tagore in Ruhuna University, Matara, the largest in any University in Sri Lanka was also handed over in October 2018.