Leveraging Ties at the time of Crisis

Editorial Analysis for IAS - Leveraging Ties at the time of Crisis

Leveraging Ties at the time of Crisis


  • Ranil Wickremesinghe’s election as the President of Sri Lanka in a crucial Parliament vote on July 20, 2022, gives India an opportunity to take the lead in the foreign aid game in its neighbourhood.


  • Sri Lanka has been facing the challenge of economic crisis amidst which the protests have led to former President fleeing from the country.
  • Inflation has spiralled to over 50%, translating into higher food and fuel prices.
  • The situation is so worsened that many families are living on just one meal per day.
  • Sri Lanka’s worst economic crisis since its independence in 1948 is for a variety of reasons including the shock from the pandemic, the Russia-Ukraine conflict and economic mismanagement under the administration of the Rajapaksas.
  • Sri Lanka has also failed in getting foreign aid in this situation.

What India can do?

  • India has been one of the major supporter economically during Sri Lanka’s one of the worst crisis since its independence.
  • Indian aid worth $3.8 billion has been received by the Lankan administration.
  • This would give a major boost to the Prime Minister’s ‘neighbourhood-first’ policy.
  • Moreover, once the Sri Lankan economy stabilises, India can deepen its trade and investment linkages with Sri Lanka.
  • Moreover, the instability in Sri Lanka would lead to significant influx of the refugees from the island country.
  • This is an opportunity for India to strengthen bilateral and regional partnerships.

The China Factor:

  • In terms of infrastructure projects China has emerged as a major partner for Sri Lanka which are on hold now.
  • So this gives a great opportunity for India to intervene and engage with the island nation and deepen the ties, working closely with other friendly countries such as the United States, Japan and the European Union.
  • Many estimates suggest that Sri Lanka would require financing somewhere around $20 billion to $25 billion over the next three years to ensure essential supply of food, medicine and fuel for its people and help in stabilising the economy.
  • One more major challenge for China is about bailing out Sri Lanka from this situation as this would lead to further list of countries requesting the same.
  • So China’s reputation would be at stake if it does not provide similar aid financially to other countries as well.

Source The Hindu

          For more updates, Click Here