Sri Lanka Turns To Indian Companies To Counter China's Influence

In a strategic manoeuvre aimed at mitigating China's substantial presence in Sri Lanka, President Ranil Wickremesinghe's administration is increasingly fostering collaborations with Indian companies for vital projects. The recent approval of a power purchase agreement with India's Adani Green Energy and the transfer of management rights for the Mattala Rajapaksa International Airport to an Indian-Russian joint venture mark significant shifts in Sri Lanka's geopolitical landscape.

The Sri Lankan government has greenlit a 20-year power purchase agreement with Adani Green Energy, entailing a USD 442 million investment to establish two wind power stations in Mannar and Pooneryn, with a combined capacity of 484 megawatts. This move follows the handover of management rights for the Mattala Rajapaksa International Airport (MRIA), previously funded by China, to an Indian-Russian consortium.

India's influence extends beyond power projects to key infrastructure initiatives in Sri Lanka. Adani Group, under the leadership of Indian billionaire Gautam Adani, secured a USD 700 million port terminal project in Colombo in 2021 and is spearheading a USD 553 million container terminal project in the same city, backed by the U.S. International Development Finance Corp.

These developments underscore India's efforts to counterbalance China's expanding influence in South Asia. The transfer of management rights for MRIA, located near the Chinese-managed Hambantota Port, adds complexity to regional geopolitical dynamics.

Analysts emphasise the broader implications of these initiatives, highlighting India's strategic interests in Sri Lanka amidst China's increasing footprint. However, concerns persist regarding India's assertive stance and the necessity for equitable partnerships focusing on technology transfers.

The involvement of India and Russia in revitalising MRIA signals a significant geopolitical shift, positioning Sri Lanka as a battleground for major powers' interests. Sri Lanka must leverage these investments to maximise benefits and navigate complex geopolitical dynamics effectively.

Rohan Masakorala, a maritime expert, stresses the importance of maintaining neutrality and fostering collaboration among global players to promote peaceful trade in the Indian Ocean.

Aviation expert Harsh Vardhan highlights Sri Lanka's strategic significance and vulnerability to China's debt-trap diplomacy. He emphasises the delicate balance required in navigating regional geopolitics, stressing the need for collaborative approaches to ensure stability.

As Sri Lanka treads this geopolitical tightrope, the development of MRIA emerges as a focal point. However, its broader impact on regional dynamics remains subject to ongoing developments and diplomatic manoeuvres among global players.