Developmental Co-operation

Sri Lanka is one of India’s major development partners and this partnership has been an important pillar of bilateral ties between the two countries over the years. With grants alone amounting to around USD 570 million, the overall commitment by GOI is to the tune of more than USD 3.5 billion. India’s portfolio of development projects encompasses virtually all major sectors of the economy, including housing, infrastructure, education, health, agriculture, fisheries, industry, handicrafts, culture and sports.


Development Cooperation

Demand driven and people-centric nature of India’s development partnership with Sri Lanka has been the cornerstone of this relationship.


Indian Housing Project

  • With an initial commitment to build 50,000 houses in war affected areas and estate workers in the plantation areas, is Government of India (GoI)’s flagship grant project in Sri Lanka. India announced that an additional 10,000 houses would be constructed in plantation areas.
  • As on date, close to 49,300 houses spread across different provinces such as Northern, Eastern, Central etc have already been completed.
  • There are also four smaller housing programmes for constructing 2400 houses across Sri Lanka. Overall, India has so far committed to construct close to 62,500 houses in Sri Lanka.


Social services

  • The country-wide 1990 Emergency Ambulance Service is another flagship project.
  • the 150-bed Dickoya hospital, 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, is the largest in any University in Sri Lanka.
  • There are another 20 ongoing grant projects across diverse spheres. This includes the iconic Jaffna Cultural Center, construction of 153 houses and infrastructure facilities in Anuradhapura; Upgradation of Saraswathy Central College in Pusselawa, Kandy;



11 Lines of credit (LOC) have been extended to Sri Lanka by the Export Import Bank of India in the last 15 years. Important sectors include: Railway, transport, connectivity, defence, solar.


Some important Projects completed are:

  • Supply of defence equipments;
  • Upgradation of railway line from Colombo to Matara;
  • Signalling and telecommunication system;
  • Supply of engine kits for buses, diesel locomotives railways, DMUs, Carrier and fuel tank wagons etc.
  • Various projects for procurement of rolling stocks for Sri Lankan Railways, Upgradation of railway tracks, setting up of railway workshop etc are at different stages of implementation.
  • A project for rehabilitation of the Kanakesanthurai harbour is being executed under a LOC
  • Projects under this LOC will include- rooftop solar units for Government buildings, rooftop solar units for low income families and a floating solar power plant.


India & Japan are allowed to build a new container terminal


  • Sri Lanka’s government said, it will allow India and Japan to develop a new container terminal at the country’s main port, several weeks after scrapping a deal with the two countries to develop one of the key terminals at the same port.
  • Sri Lanka halted the 2019 agreement for India and Japan to develop and operate the crucial East Container Terminal at Colombo Port after weeks of protests by trade unions and opposition parties.
  • India has selected Adani ports, which was earlier chosen to invest in the East Container Terminal. Which will be operated on a build, operate and transfer basis for 35 years.


China’s angle to the move


  • India, which considers the Indian ocean region to be its strategic backyard, has worried by rival China’s growing economic and political influence over neighbouring Sri Lanka.
  • China considers Sri Lanka to be a critical link in its massive “Belt and Road” global infrastructure building initiative and has provided billions of dollars in loans for Sri Lankan projects over the past decade. The projects include a seaport, airport, port city, highways and power stations.
  • China already operates the Colombo International Container Terminal as a joint venture with the Ports Authority.
  • Critics say the Chinese-funded projects are not financially viable and that Sri Lanka will face difficulty in repaying the loans.
  • In 2017, Sri Lanka leased a Chinese-built port located near busy shipping routes to a Chinese company for 99 years to end the heavy burden of repaying the Chinese loan used to build it.
  • Japan and India are members of Quad, a group of Indo-Pacific nations that also includes the US and Australia that is seeking to counter Chinese influence in the region