India has strengthened its ties with Sri Lanka through a significant financial assistance package, further solidifying its position in the region amidst growing competition with China. This move is part of India's strategic engagement with Colombo, which includes cooperation on power grid connectivity, digitalization, security, and healthcare.
The $4 billion financial assistance package provided by India is the latest in a series of support measures extended to Sri Lanka, following a severe financial crisis in 2022. This aid has been described as "unprecedented" by Indian High Commissioner Santosh Jha, who noted that it is being continued in various areas and is much appreciated by Sri Lanka.
In addition to the financial assistance, India and Sri Lanka have also signed a pact to improve their mutual defense ties. The agreement between India and Sri Lanka has been welcomed by both sides, with Indian Prime Minister Narendra Modi's visit to Sri Lanka marking a significant milestone in their bilateral relations.
The development of an energy hub in Trincomalee is also part of the agreement, which will provide Sri Lanka with much-needed economic benefits, enhance its energy security, and reduce dependence on other countries. This move is seen as a counterbalance to China's influence in the area, particularly after China's state energy firm Sinopec signed a deal to build a $3.2-billion oil refinery in Hambantota.