A Recalibration of Sri Lanka’s Foreign Policy? The Era of Dissanayake

by Hasith Kandaudahewa

In September 2024, two years after a severe national economic crisis began, Sri Lanka witnessed a significant shift in its political landscape with the election of Anura Kumara Dissanayake as president. Lack of transparency and good governance had resulted in substantial public criticism against the previous governments, which carved the path for the rise of Dissanayake, a neo-leftist political leader advocating for social justice and reform. This shift in public sentiment marked a break from the almost eight-decade-long political domination of right-wing nationalist or liberal governments in Sri Lanka.

While regional and international observers will certainly pay attention to the newly-elected president’s steps on the domestic front, in foreign policy, Dissanayake finds himself trying to precariously navigate between India and China. Previous governments in Colombo collaborated with both China and India on key infrastructure and development projects, but some of these efforts sparked nationalist public outcry on the basis of sovereignty and resource management concerns. Thus, Dissanayake’s biggest challenge will be to reassess those decisions while being sensitive to both emerging geopolitical realities and public sentiment.

Background

Prior to his ascent to the presidency, Dissanayake and his political party, the Janatha Vimukthi Peramuna (JVP), firmly stood against India’s political influence in Sri Lanka. The deployment of the Indian Peacekeeping Force (IPKF) in Sri Lanka during the 1980s and 1990s, and India-infused constitutional reforms such as the 13^th Amendment, agitated Dissanayake’s leftist party. Since then, on many occasions, Dissanayake has demonstrated anti-India rhetoric. For instance, he led the campaign against the India-Sri Lanka Economic and Technological Cooperation Agreement (ETCA) during his term as an opposition parliamentarian. Likewise, in 2021, Dissanayake and his party rallied against the East Container Terminal development deal with India, arguing that it constituted a threat to Sri Lanka’s sovereignty. In this regard, Dissanayake’s past rhetoric on India appears to suggest that he once viewed New Delhi as a big brother who actively intervened in Sri Lanka’s domestic politics and sought to exploit its resources. By contrast, while Dissanayake stood against a controversial deal with China involving the Hambantota Port, he has not engaged in hostile rhetoric toward Beijing quite as frequently.

In the months leading up to his rise to the presidency, however, Dissanayake has appeared to soften his stance toward India. In early 2024, Dissanayake received an invitation for talks from New Delhi, likely as a politician of import who may one day be in power in Colombo. After the visit, Dissanayake stated that his conversations in India were productive and that his party was “mindful of India’s concerns, including its security.”

A look at Dissanayake’s election manifesto provides a glimpse of how Dissanayake is likely to manage key partners such as China and India as he engages with them for Sri Lanka’s development. The manifesto stresses that Sri Lanka’s geographical location is an advantage in ensuring economic growth. It also declares that Sri Lanka should maintain “dignified diplomacy” driven by national interest rather than pursuing a foreign policy influenced by “external factors and the survival choices of ruling parties.” In this regard, the manifesto states its opposition to the establishment of foreign military bases and military agreements in the Indian Ocean. With this background in mind, it is helpful to assess Dissanayake’s outreach to India and China over the past few months and assess what Colombo’s future direction towards New Delhi and Beijing will be.

Reinventing ties with India and Balancing Ties with China

Soon after he became president, Dissanayake paid an official visit to India, where he met with Indian Prime Minister Narendra Modi and other officials to bolster bilateral relations. The visit reaffirmed Sri Lanka’s “neighborhood-first” foreign policy and Colombo’s longstanding strategy of treating India as its closest ally. The visit facilitated Colombo and New Delhi’s intention to collaborate to secure mutual interests, including ensuring a “free, open, safe, and secure Indian Ocean Region.” More specifically, the joint statement emphasized the need for enhanced bilateral cooperation in energy, ports, and defense. Sri Lanka sought India’s assistance with various development projects, including redeveloping the Kankesanthurai port and supporting the elimination of drug/human trafficking through their shared nearby sea lines. Meanwhile, India confirmed its intention to continue working on the Sampur solar power and interstate power grid projects in Sri Lanka, which may result in Colombo’s reliance on New Delhi for its future energy needs.

Regionally as well, Dissanayake appears to be willing to support India’s growing role and ambitions in the Indian Ocean Region (IOR). For instance, he agreed to continue with the Colombo Security Conclave (CSC), a multilateral grouping of regional IOR states focused on maritime security. While this grouping can support Colombo’s regional security by combating trafficking, transnational crime, and terrorism, it could also be perceived as India’s attempt to project itself as a regional security provider in the IOR to the detriment of Beijing, thereby carrying the potential to ruffle China’s feathers.

Dissanayake has, however, been careful already to balance ties with India and China. Shortly after his visit to New Delhi, Dissanayake visited Beijing in January 2025. The idea behind engagement with Beijing seems to be for Sri Lanka to gain access to China’s supply chain network as well as financial aid to advance Sri Lankan ports as a naval service hub within the Indian Ocean region. China’s support for debt restructuring and infrastructure development are especially vital for reinforcing Sri Lanka’s role as a regional and financial hub in the Indo-Pacific. Toward these ends, on his visit, Dissanayake achieved the renegotiation of a USD $3.7 billion oil refinery in the Hambantota Industrial Zone, the continuation of the currency swap agreement, and stronger cooperation in digital economies. In return, Dissanayake offered prolonged support for the One China Policy and reiterated Sri Lanka’s commitment to China’s Belt and Road initiative by agreeing to continue projects such as the Hambantota Port and Colombo Port City. These actions show that Dissanayake is ready to deepen ties with China while also strengthening relations with India.

Protecting Sri Lanka’s Sovereignty and Managing Public Sentiment

Dissanayake’s engagement with India and China suggests that he is hoping to leverage both countries for Sri Lanka’s development while simultaneously reassuring them that the country will remain non-aligned. However, this increased engagement could also make Sri Lanka more dependent on the two regional powers and undermines Dissanayake’s vocal commitment to safeguarding Sri Lanka’s sovereignty.

For instance, just after the New Delhi visit in December and ahead of his visit to Beijing in January, Dissanayake decided to continue the joint development of Sri Lanka’s Trincomalee oil reservoir with India. The move’s timing suggests that it may have been intended to placate Indian fears about the Beijing visit. However, the deal could also make Sri Lanka increasingly dependent on New Delhi for its energy needs. In particular, given that the reservoir is located near vital shipping routes, India could use its operational authority over this port to prevent Sri Lanka’s deeper integration into China’s supply chain network. As an opposition politician, Dissanayake had railed against similar deals. It is unclear how he plans to persuade the public of such foreign policy commitments now that he is in power.

Dissanayake’s recent engagement with China, especially to advance the Hambantota Industrial Zone and the Colombo Port City, have similarly raised concerns in Sri Lanka about the country’s sovereignty. As China has operational authority over the Hambantota Port, it could transform the port into its IOR supply chain hub and, in the future, turn it into a military base. Likewise, China’s influence in the development of the Colombo Port City could make Sri Lanka more economically reliant on China. Beijing could in turn use this leverage to disrupt closer ties between Colombo and New Delhi.

If Sri Lanka remains heavily dependent on Beijing and New Delhi, it will challenge the country’s ability to safeguard its sovereignty and maintain strategic autonomy. To mitigate this risk, Dissanayake should diversify his regional and global engagement, by involving countries such as Japan (which already has a number of investments in the country) or South Korea more meaningfully in infrastructure development while building robust financial ties with oil-rich Gulf economies like Qatar and Saudi Arabia. Over time, this can help reduce Sri Lanka’s financial and strategic dependence on both India and China.

Undoubtedly, Dissanayake is commandeering Sri Lanka through an uncertain strategic landscape. Under previous governments, Sri Lanka’s foreign policy was often influenced by domestic political imperatives or ideological alignment with one regional or global power over another. This had disastrous results for its sovereignty. Dissanayake’s stated intent of basing Sri Lanka’s foreign policy on national interest holds much promise. But for it to be successful, Dissanayake must work to diversify his country’s foreign relations and dilute the duopoly enjoyed by India and China.

The article appeared in the southasianvoices