Event ReportsPublished on Feb 18, 2012
Given the increasing investment climate in post-war Sri Lanka and the growing Indian economy, the mood and climate are now just right for India-Sri Lanka relations to move forward even more, according to the outgoing Deputy High Commissioner of Sri Lanka.
Right climate to take forward India-Sri Lanka relations

"India is our relation, others are our friends." These borrowed words from Sri Lankan President Mahinda Rajapaksa were repeated by Mr. Vadivel Krishnamurthy, the outgoing Deputy High Commissioner of Sri Lanka for Southern India, while initiating an interaction on "Taking forward India-Sri Lanka Relations" at the Chennai Chapter of Observer Research Foundation on Saturday, 18 February 2012.

Going through the centuries old history of India-Sri Lanka relations, Mr. Krishnamurthy said history showed that India’s relations with Sri Lanka grew smoothly but later due to issues with southern India, the relations turned sour. He said some major issues between the two countries like citizenship for upcountry Tamils of recent Indian origin, which arose at the turn of Independence for Sri Lanka, were resolved.

Laying stress on the fishermen’s issue, Mr. Krishnamurthy said Indian fishers from Tamil Nadu resorted to methods that were banned in Sri Lanka, leading to depletion of resources and destruction of fish fields, apart from the loss of catch for the local fishers, who were also Tamil-speaking. He also focussed on other aspects of bilateral relations. He appreciated the Indian policy of non-interference in the decisive ’Eelam War IV’. He said though some Indian analysts often referred to increased Chinese investments in Sri Lanka as being detrimental to India’s strategic interests, it was not the case, however.

Mr. Krishnamurthy said India-Sri Lanka relations have undergone a qualitative and quantitative transformation. Trade and investments have increased dramatically, infrastructure linkages are constantly being augmented, defence collaboration has increased, and there is a general, broad-based improvement across all sectors. Since a bilateral free trade agreement came into effect in 2000, the Indo-Sri Lankan trade has risen by 128 per cent by 2004 and quadrupled by 2006, reaching $2.6 billion between 2000 and 2004. India’s exports to Sri Lanka increased by 113 per cent over the last four years while Sri Lankan exports to India went up by 342 per cent. Indian exports accounted for 14 per cent of Sri Lanka’s global imports. India is also the fifth largest export destination for Sri Lankan goods, accounting for 3.6 per cent of its exports.

Mr. Krishnamurthy said there has been a huge investment inflow from India to Sri Lanka. In 2005, the FDI flow from India stood at $18 million and peaked in 2008 at $126 million. Now, India is among the top five investors in Sri Lanka with $457 billion cumulative. Basic top investments include Cairns India Oil Exploration, Bharti Airtel, Indian Oil, Piramal Glass, Tata Groups, Taj Hotels and Ashok Leyland. Four Indian banks, namely, the State Bank of India, Indian Bank, Indian Overseas Bank and ICICI, have branches in the island-nation. India and Sri Lanka are members in several regional and multilateral organisations such as the South Asian Organisation for Regional Cooperation (SAARC), South Asia Cooperative Environment Programme, South Asia Economic Union and BIMSTEC, working to enhance cultural and commercial ties.

Today, the India-Sri Lanka relationship is quite strong and calls for further strengthening of the bilateral ties by building on the rich legacy of historical and cultural linkages, and the strong economic and development partnerships that too have been built over the recent years, Mr. Krishnamurthy said.

Given the increasing investment climate in post-war Sri Lanka, and the growing Indian economy, coupled with the increasing scope for people-to-people contact, the mood and climate were now just right for bilateral relations to move forward even more, Mr. Krishnamurthy, whose tenure at Chennai would be noted for his initiative in conducting ’mobile services’ at various refugee camps for Sri Lankan Tamils in Tamil Nadu and issuing birth certificates and registering Sri Lankan children born in those camps, said.

Mr. Krishnamurthy’s these initiatives would help the camp-inmates to obtain Sri Lankan passports and apply for jobs back home or in any other country in the world and travel there with valid documents. As Deputy High Commissioner, Mr. Krishnamurthy also worked towards sorting out individual cases of Tamil Nadu fishers caught in Sri Lankan waters, and vice versa, and thus bettering relations between Colombo and Chennai, via New Delhi.

(This report is prepared by Priya Arora and Sumedha Minocha, 1st year M.Sc. Economics, Madras School of Economics, Chennai)

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