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India strengthens energy and military presence in Sri Lanka amid growing Chinese influence

New Delhi signed new defence and energy agreements with Colombo, consolidating its strategic influence on the island as China continues expanding its investments.

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The Prime Minister of the Republic of India, Narendra Modi, concluded several major bilateral agreements with Sri Lanka during an official visit marking a strategic shift in cooperation between the two countries. These commitments include a five-year defence partnership and the revival of a solar power plant project in the island’s north-east. The visit comes shortly after the election of Anura Kumara Dissanayake, Sri Lanka’s first left-wing president, and takes place amid intensifying regional competition between New Delhi and Beijing.

Strategic India–Sri Lanka defence agreement

The new military agreement provides for the training of Sri Lankan troops in India, as well as enhanced technology exchanges and intelligence sharing. This security cooperation was described as mutually beneficial by both parties. Narendra Modi stated that “India’s and Sri Lanka’s security interests are aligned,” while President Dissanayake reiterated that “Sri Lanka’s territory will not be used by any party to compromise India’s security.” These remarks directly address India’s concerns over Chinese research vessels docking at Sri Lankan ports, which are often suspected of conducting maritime surveillance, although these claims have been consistently denied by Beijing.

Revival of a solar project with Indian backing

Alongside security discussions, the two leaders launched the construction of a 120-megawatt solar power plant in the Trincomalee district, a project that had been suspended for years and is now being reactivated with Indian support. This energy development is part of a series of regional initiatives aimed at strengthening Sri Lanka’s energy independence while deepening bilateral ties.

China–India competition in the energy sector

In January, Colombo had already signed a USD3.7bn agreement with a Chinese state-owned enterprise to build an oil refinery, considered the largest foreign investment in the country’s economic history. This move follows the 2017 concession of the Hambantota Port to China for a 99-year lease, after Sri Lanka defaulted on a loan linked to the infrastructure.

Redefining regional geopolitical balances

When Sri Lanka defaulted on its debt in 2022, over half of its bilateral debt, amounting to USD14bn, was owed to China. Through its recent initiatives, India seeks to reaffirm its role in the Indo-Pacific region, combining energy diplomacy and military cooperation to counter China’s already well-established presence on the island.

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