Decades of Indian diplomatic efforts finally paid off with India signing three agreements with the government of Sri Lanka on the joint development of the Trincomalee oil tank farm in eastern Sri Lanka. The oil park will be managed by a 51-49% joint venture between Ceylon Petroleum Complex and the Lankan subsidiary of Indian Oil Corporation.

The agreement will enhance economic cooperation between India and Sri Lanka, help strengthen India’s energy security and ensure India’s presence in an area of ​​high strategic value.

The once warm relationship between India and Sri Lanka has been turbulent in recent years as Colombo assiduously courted China. While former President Mahinda Rajapaksa pushed the country into multibillion-dollar debt by allowing the Chinese to develop overpriced and often unprofitable infrastructure projects on the island, Maithripala Sirisena’s government gave in. the Port of Hambantota to China for a 99-year lease. Gotabaya Rajapaksa’s presidency was no different. It handed over the Colombo East Container Terminal project to the Chinese after canceling an agreement with India and Japan for its development. Public opposition to India’s participation was cited as the reason for canceling the ECT agreement with India. However, Colombo does not offer such an apology when it comes to Chinese plans, although public unease with China’s policy of not hiring local labor is growing.

Sri Lanka is in the throes of a serious economic crisis. The country’s foreign exchange reserves fell to $ 1.6 billion, just enough to pay for imports for a few weeks; inflation has reached record levels; food prices are skyrocketing. The Rajapaksa government is in talks with India for a $ 1.9 billion economic aid package. He also called on the Chinese to restructure debt repayments to ease Sri Lanka’s economic burden. Chinese Foreign Minister Wang Yi made no such announcement during his recently completed visit to the island. The possibility that China will demand the delivery of projects in lieu of debt repayment cannot be ruled out. This is what happened when the Sirisena government was unable to repay the debt incurred on the Hambantota project. China is not a generous partner, and although it is willing to shell out larger sums than India to get Sri Lanka out of its current problems, it will only plunge the island nation into a more serious crisis. .

While India may derive satisfaction from the Trincomalee accord, the struggle for Indo-Chinese influence in Colombo will only intensify. The Rajapaksas, on the other hand, should seek to make the most of India and China. Delhi should also expect them to hand more projects, even military concessions, to China for Beijing to bail them out of their problems.