The two sides want to cooperate for construction of a multi-product petroleum pipeline from the southern part of India to Sri Lanka
Prime Minister Narendra Modi and Sri Lankan President Ranil Wickremesinghe have underlined the importance of promoting and strengthening connectivity in all its dimensions as the key enabler for deeper bilateral ties. This includes energy & power connectivity as well as trade, economic, and financial connectivity. According to the India-Sri Lanka Economic Partnership Vision shared by India’s Ministry of External Affairs (MEA) after they met in New Delhi on Friday (July 21, 2023), the two leaders agreed that India’s sustained and rapid economic growth, and technological advancement coupled with the current phase of stabilisation and economic recovery, reconstruction and growth in Sri Lanka, provides a unique opportunity to forge a closer and deeper bilateral economic partnership between the two countries and enhance growth in the Indian Ocean Region. “To this end, the leaders underlined the cardinal importance of promoting and strengthening connectivity in all its dimensions as the key enabler,” the statement noted. Here are key takeaways from the India-Sri Lanka Economic Partnership Vision Maritime connectivity India and Sri Lanka will cooperate in development of ports and logistics infrastructure at Colombo, Trincomalee and Kankesanthurai with an aim to consolidate regional logistics and shipping, as per mutual understanding. It has been decided to resume passenger ferry services between Nagapattinam in India’s Tamil Nadu state and Kankesanthurai in Sri Lanka. The two sides will also work towards early resumption of ferry services between Rameshwaram and Talaimannar, and other mutually agreed places. Air connectivity With the resumption of flights between Jaffna and Chennai enhancing people-to-people ties, the two leaders have agreed to further expand it to Colombo as well as explore connectivity between Chennai and Trincomalee, Batticaloa and other destinations in Sri Lanka. India and Sri Lanka have also decided encourage and strengthen investment and cooperation in civil aviation, including augmentation of airport infrastructure at Palaly for greater economic benefits to the people. Energy and Power connectivity A Memorandum of Understanding (MoU) has been signed on cooperation in developing renewable energy. This will develop Sri Lanka’s significant renewable energy potential, including offshore wind and solar, thus enabling Sri Lanka achieve its target of generating 70% of power requirements from renewable energy sources by 2030; The two sides have also decided to establish a high capacity power grid interconnection to enable bidirectional electricity trade between Sri Lanka and other regional countries. This has the potential to not only bring down the costs of electricity in Sri Lanka but also help create a valuable and dependable source of foreign exchange for Sri Lanka. The ongoing cooperation in development of Trincomalee Tank Farms is a reflection of efforts to develop mutually beneficial cooperation projects in the Trincomalee area. To build on this, India and Sri Lanka have agreed to develop Trincomalee as a national and regional hub of industry, energy and economic activity on the basis of mutual understanding; The two nations have also expressed their intent to cooperate for construction of a multi-product petroleum pipeline from the southern part of India to Sri Lanka. The aim is to to ensure affordable and reliable supply of energy resources to Sri Lanka. Additionally, they will also undertake mutually agreed joint exploration and production of hydrocarbons in Sri Lanka’s offshore basins with an aim to develop Sri Lanka’s upstream petroleum sector. Trade, Economic and Financial Connectivity Discussions will soon be taken up on an India-Sri Lanka Economic and Technology Cooperation Agreement (ECTA) to comprehensively enhance bilateral trade and investments in new and priority areas. The two sides have agreed to facilitate investments from India in the divestment of Sri Lankan State-owned Enterprises and in manufacturing/economic zones in various sectors in Sri Lanka. During their talks, Prime Minister Modi and President Wickremesinghe also noted that the decision to designate INR as currency for trade settlements between the two countries has forged stronger and mutually-beneficial commercial linkages. They also agreed to operationalise UPI based digital payments for further enhancing trade and transactions between businesses and common people. Acknowledging that India’s rapid digitalisation is an important force-multiplier for ongoing transformational changes in India, both in economic development and governance, they agreed to leverage India’s Digital Public Infrastructure in accordance with Sri Lanka’s requirements and priorities towards effective and efficient delivery of citizen-centric services to the people of Sri Lanka. People-to-people Connectivity The two sides will promote India’s Buddhist circuit, and Ramayana trail as well as ancient places of Buddhist, Hindu and other religious worship in Sri Lanka for enhancing tourism; They will explore cooperation between educational institutions on both sides including through establishment of new higher education and skilling campuses in Sri Lanka in accordance with Sri Lanka’s requirements and priorities; During the talks it was also decided to expand cooperation between research and academic institutes in areas of mutual interests such as agriculture, aquaculture, IT, business, finance and management, health and medicine, earth and marine sciences, oceanography, space applications, as well as history, culture, languages, literature, religious studies and other humanities; and A feasibility study will be conducted at an early date to establish land connectivity between Sri Lanka and India. This will develop land access to the ports of Trincomalee and Colombo, propelling economic growth and prosperity in both Sri Lanka and India.