TIDES OF INFLUENCE

As Prime Minister Modi begins his Sri Lanka visit, India hopes to step up efforts to counter China's footprint on the island

- SUBHOMOY BHATTACHARJEE

In a recent conversation with Business Standard, KM Mahinda Siriwardana, finance secretary in the Sri Lanka government, said investment in Port City Colombo was the biggest business plan the island had to offer.

Investment in the Port City, seen as a micro version of the Dubai International Financial Centre, is, however, not a priority for India.

For China, too, the investment already made here is far less attractive than in ports like Hambantota, where it plans to set up a $3.7 billion oil refinery — far bigger in size than what the Sri Lankan market needs.

However, wary of the Chinese influence, India has begun chasing out most investments it sees as sympathetic to it in Sri Lanka.

For instance, the presence of foreign ships under the guise of research and development, welcome till 2022, has been frowned upon by India.

Similarly, Sri Lanka Sustainable Energy Authority and the Indian company U-Solar Clean Energy Solutions signed a contract in March last year for building hybrid renewable energy systems in three islands in the Jaffna peninsula in the island's north.

The project was initially supposed to be a China-led one with Asian Development Bank (ADB) financing.

This has become possible as India's economic heft has risen with the $4 billion in food and financial assistance it offered to Sri Lanka just days into the meltdown of 2022, which brought life back to the island's economy.

This will be followed up more substantively as Prime Minister Narendra Modi makes his first visit to the island since the meltdown on April 4.

This comes after the visit by Sri Lankan President Anura Kumara Dissanayake to India in December 2024.

Siriwardana said India's assistance nursed the economy back to health, adding that he was also pleased to point out that almost half of it had not been used.