India-Sri-Lanka Relations
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India-Sri-Lanka Relations
GS II >> International Relations >> Bi-lateral Relations
Context: President Ranil Wickremesinghe’s recent announcement on land connectivity with India echoes a proposal he made 20 years ago about a bridge between Rameswaram (India) and Talaimanar (Sri Lanka).
Overview of India-Sri-Lanka relations:
- Historical and cultural ties: The relationship between India and Sri Lanka dates back more than 2500 years, marked by intellectual, cultural, religious, and linguistic interactions. Both nations share a rich legacy of historical connections, fostering a deep-rooted bond.
- Trade and investment: Over the years, trade and investment between India and Sri Lanka have grown significantly, contributing to economic cooperation. Bilateral engagements extend to various sectors, including development, education, culture, and defence.
- International cooperation: India and Sri Lanka collaborate on major international issues, reflecting a shared understanding and alignment on global matters. The two countries engage in diplomatic efforts to address common challenges and contribute to regional stability.
Recent status of India-Sri-Lanka relations:
- Power Grid cooperation: Despite a memorandum of understanding signed in 1970, the progress on the bilateral power grid between India and Sri Lanka has been slow.
- The transmission network project, aiming for a 1,000 MW transfer and a High Voltage Direct Current link, faces delays, impacting Sri Lanka’s power supply.
- Trade and economic ties: The India-Sri Lanka Free Trade Agreement, signed in 1998, has not seen substantial progress.
- Bilateral economic ties have faced challenges, with India regaining its position as the largest source of imports for Sri Lanka, contributing to about 26% of total imports.
- Tourism and economic potential: Tourism, a major revenue source for Sri Lanka, sees India as the largest single country of tourist arrivals, constituting 17% of the total.
- Recent developments and initiatives: Positive momentum has been witnessed in the past year, with resumed air services between Chennai and Jaffna, passenger ferry services, and a joint venture in the dairy sector.
India-Sri-Lanka bilateral relations:
- Political relations:
- High-level exchanges: Regular visits and engagements at the highest levels, showcasing the importance both countries place on their relationship.
- Virtual Bilateral Summit (VBS): Prime Minister Modi and Sri Lankan Prime Minister Mahinda Rajapaksa held a VBS in September 2020, strengthening bilateral ties. A joint statement, ‘Mitratva Maga,’ covered various areas of cooperation.
- Official visits: Key visits include Sri Lankan PM Mahinda Rajapaksa’s visit in 2020, and Indian EAM Dr. S. Jaishankar’s visit in 2021, enhancing diplomatic ties.
- Historical visits: Recounts visits by former leaders like Narendra Modi’s 2015 and 2017 visits, expressing solidarity after Easter Sunday attacks, and visits by former leaders Maithripala Sirisena and Ranil Wickremesinghe.
- Commercial relations:
- India-Sri Lanka Free Trade Agreement (ISFTA): Initiated in 2000, significantly contributing to bilateral trade expansion.
- Bilateral trade: India is Sri Lanka’s largest trading partner, with merchandise trade reaching USD 5.45 billion in 2021. Both countries benefit from economic ties, with Sri Lankan exports to India utilizing ISFTA benefits.
- Foreign Direct Investment (FDI): India a major contributor to FDI in Sri Lanka, with investments in various sectors like petroleum, tourism, manufacturing, real estate, and more.
- Development cooperation:
- Grant projects: India’s commitment of over USD 3.5 billion in grants for projects spanning education, health, livelihood, housing, and industrial development.
- Lines of Credit: 11 LOCs extended for projects in railways, transport, connectivity, defence, and solar, reinforcing economic collaboration.
- Cultural Ties:
- Buddhism: Deep-rooted Buddhist ties, with India announcing a USD 15 million grant for promoting bilateral Buddhist connections.
- Cultural exchange: Cultural Cooperation Agreement forms the basis for periodic cultural exchange programs.
- People-to-People Ties:
- Pilgrimages: Prime Minister Modi’s announcement of a USD 15 million grant for Buddhist ties and the inaugural flight to Kushinagar strengthens people-to-people connections.
- International Day of Yoga: Celebrated annually, fostering wellness and therapeutic yoga.
- Tourism:
- e-tourist visa: Launched in 2015, enhancing tourism between the two nations.
- Air travel bubble: Arrangement in 2021 to restore air connectivity affected by pandemic-related travel restrictions.
- Human resource development: India offers about 710 scholarship slots annually to Sri Lankan students, fostering education ties.
Significance of India-Sri-Lanka bilateral relations:
- Strategic geopolitical position: Sri Lanka’s strategic location in the Indian Ocean is crucial. The East-West maritime route around the island handles a significant portion of global oil and container transportation.
- Maritime security and trade potential: Sri Lanka’s ports hold potential as essential maritime hubs. Plays a vital role in ensuring maritime security and securing Sea Lanes of Communication.
- Chinese influence and regional stability: Chinese influence, notably through the Belt and Road Initiative, has increased. India prioritizes stability, peace, and security, intensifying Sri Lanka’s regional significance.
- Indian Ocean strategic importance: Sri Lanka’s position in major shipping lanes of the Indian Ocean is critical. Control over these lanes is pivotal for India’s trade and military operations.
Challenges:
- Fishermen issue: Both countries have often faced disputes related to fishing rights in the Palk Strait and the Gulf of Mannar. Conflicts arise when fishermen from one country are apprehended by the other for crossing maritime boundaries.
- Political dynamics: Political differences or changes in leadership can influence bilateral relations. Shifts in foreign policy priorities or diplomatic approaches can impact how the two countries interact on regional and global platforms.
- China’s influence: The influence of external actors, particularly China, in the region can be a source of concern. India and Sri Lanka may perceive each other’s relationships with external powers as potential threats to their own strategic interests.
- Security concerns: Security issues, such as terrorism or cross-border activities, can strain relations. Both countries need to collaborate on security matters to ensure regional stability.
- Ethnic and cultural ties: Given the shared history, ethnicity, and cultural ties, any issues related to the treatment of Tamil minorities in Sri Lanka can affect bilateral relations. India has historically been concerned about the welfare of Tamils in Sri Lanka.
Way forward:
- Diplomatic dialogue: Continued diplomatic dialogue is crucial for addressing concerns and finding common ground. High-level meetings and communication channels between the governments can foster mutual understanding.
- Trade and economic cooperation: Strengthening economic ties through trade agreements and partnerships can be mutually beneficial. Addressing trade imbalances and facilitating smoother trade can contribute to improved relations.
- Cultural and people-to-people ties: Encouraging cultural exchanges, tourism, and educational collaborations can enhance people-to-people ties. Promoting a better understanding of each other’s cultures can help build stronger relations.
- Security cooperation: Collaborating on security matters, including counter-terrorism efforts and maritime security, can contribute to regional stability. Joint efforts to address common security challenges can strengthen the strategic partnership.
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Digital Public Infrastructure (DPI)
GS III >> Economy >> Infrastructure
Context: The Reserve Bank of India (RBI) is working on establishing a cloud facility for the financial sector in India as it looks to enhance the security, integrity and privacy of financial sector data.
- The regulator is taking the same approach as the government has done with setting up ‘Digital Public Infrastructure’ (DPI). The biometric identity programme Aadhaar and United Payments Interface (UPI) are key examples of DPI.
About Digital Public Infrastructure (DPI):
- DPI is a digital network that enables countries to safely and efficiently deliver economic opportunities and social services to all residents.
- It includes digital methods of identification and verification, civil registration, digital transactions, money transfers, data exchange, and information systems.
- DPI was first introduced in India in 2009 with the launch of Aadhaar.
India’s Digital Public Infrastructure:
- JAM (Jan Dhan, Aadhaar, and Mobile):
- Aadhaar provided the first identity document for 65-70 million individuals.
- It has furthered financial inclusion, with the percentage of the population having bank accounts increasing from 53% in 2015-16 to 78% in 2019-21, as per the National Family Health Survey (NFHS).
- Additionally, direct benefit transfer of subsidies has helped the government reduce its overall subsidy expenditure by plugging the leakages.
- Digital Public Goods (DPGs):
- Notable examples include digital verification (e-KYC), digital signatures, Digital Repository (Digilocker), Digital Payments (UPI), ONDC, and the Account Aggregator Framework.
- These have resulted in greater financial inclusion, access to credit, increased economic growth, access to e-commerce markets, and credit availability for smaller businesses.
- Digital Finance Architecture:
- They include the digitalized GST system, digital identities (Aadhaar, eShram Portal, SVANidhi, Udayam Portal), and UPI.
- These have formalised business transactions, simplified access to formal credit, and contributed to the formalisation of the economy and workforce.
- Unified Digital Interfaces for Simplified Governance:
- Notable examples are the National Single Window System for business approvals, JanSamarth portal for credit-linked Central Government schemes, the UMANG app for access to government services, and PM Gatishakti, a GIS-based platform facilitating integrated infrastructure connectivity projects.
- These initiatives enhance the ease of doing business, reduce logistics costs, and streamline governance through system integration.
Challenges:
- Privacy and security apprehensions: Concerns about privacy breaches and data security issues can discourage individuals from adopting digital technologies, especially when dealing with sensitive personal information.
- Insufficient infrastructure accessibility: Many regions, particularly rural and remote areas, face issues related to unreliable internet access and a lack of digital infrastructure. This problem is further exacerbated by limited access to electricity and a shortage of essential digital devices such as computers and smartphones.
- Affordability issues: Even when digital infrastructure is available, the cost of internet access and digital devices can be a significant barrier for numerous individuals and families, especially in low-income communities.
- Language and content barriers: The prevalence of content in a few dominant languages can exclude non-English speakers or those not proficient in the primary language. The absence of localised and relevant content can obstruct access to essential information and services.
- Challenges For Persons with Disabilities: They may encounter difficulties in accessing and using digital technologies due to limited accessibility features and design considerations in digital platforms.
Way forward:
- Regulatory Support: Regulatory frameworks should ensure data protection, privacy, and equitable access to digital services. Encouraging public-private partnerships can help mobilise resources and expertise.
- Investing in Digital Infrastructure, particularly in rural and remote areas, to enhance internet connectivity and access to digital services. It can be achieved by expanding broadband networks and ensuring affordable and reliable internet services.
- Localised content: Digital content in regional languages should be encouraged for diverse linguistic communities, ensuring that information and services are accessible to a broader audience.
- Targeted use of services: Identifying and developing specialised use cases and services that address the needs of underserved communities can drive digital adoption. For instance, digital healthcare solutions, agricultural advisories, and digital education platforms can benefit rural populations.
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