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Sri Lanka’s Economic and Geopolitical Balancing Act

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Sri Lanka’s Economic and Geopolitical Balancing Act

Economic recovery has brought Sri Lanka a modicum of stability, but domestic strains and great-power rivalry could test how long it lasts.

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By Avinash Paliwal
Published on Oct 6, 2026
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Introduction

On March 4, 2026, Sri Lanka was caught off-guard when the U.S. Navy submarine, the USS Charlotte, sank the Iranian frigate, IRIS Dena, 19 nautical miles off Sri Lanka’s southwest Galle coast. The attack left 104 crew members dead and brought the 2026 Iran war into subcontinental waters. The Sri Lanka Navy rescued thirty-two Iranian sailors, but the Sri Lankan government’s overall response drew criticism from opposition leaders.

President Anura Kumara Dissanayake—head of the National People’s Power coalition, which is led by the Marxist-Leninist party, the Janatha Vimukthi Peramuna (JVP)—clarified to the Sri Lankan parliament: “Our unwavering stance on this matter is one of neutrality.” But the opposition leader, Sajith Premadasa of the United National Party, challenged Dissanayake’s neutrality position as an excuse for passivity. The incident was “a death blow to Sri Lanka’s sovereignty,” Premadasa claimed as he pressed the president to condemn American and Israeli aggression against Iran as well as Iran’s targeting of other Gulf states. Former foreign minister G. L. Peiris was blunter: the “Sri Lankan government has actually insulted Iran, which is a friendly nation where Sri Lanka is concerned.” The opposition also questioned the government’s failure to act quickly on the Iranian frigate’s request to enter Sri Lankan territorial waters and its apparent lack of awareness of the USS Charlotte’s movements.

Dissanayake’s foreign policy of neutrality offers Colombo room to focus on economic recovery, but, as the IRIS Dena incident shows, international economic and geopolitical turbulence will test how long that posture can be sustained. The country’s 2024 presidential elections offered much-needed political clarity after an acute economic crisis in 2022, the ouster of Sri Lanka’s president Gotabaya Rajapaksa amid the Aragalaya (Struggle) protests, and two years of political uncertainty. The NPP’s promise of reforms and the continuation of an International Monetary Fund (IMF) bailout have been key to Sri Lanka’s post-2022 social contract.

Yet with the current IMF loan cycle ending in 2027 and national elections due in 2029, early signs of volatility in Sri Lanka’s domestic and international politics are beginning to show. At home, the NPP’s inability to deliver many of its promised reforms signals that even if a 2022-style meltdown is unlikely, the economy remains under pressure. Unlike in 2022, however, a future crisis could strengthen a coercive left-wing one-party state rather than produce another popular uprising that sweeps a government from power. With regard to the country’s external relations, reliance on IMF funding—supported by an Indian backstop—has drawn Sri Lanka closer to India and the West. However, Chinese capital and finance, not just for infrastructure development but also through illicit networks, are also shaping Sri Lanka’s domestic and international politics. Looking to the future, Dissanayake’s principal challenge is to preserve the political and economic stability that his government has consolidated after 2024 while simultaneously managing multiple pressures that could unsettle both the NPP’s domestic moderation and its carefully calibrated foreign policy.

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Domestic Politics and the Limits of Reform

Sri Lanka turned a corner in September 2024 when the NPP coalition trounced traditional political parties and went on to win 159 of 225 parliamentary seats. The elections marked the start of a new political and economic journey for a country that had witnessed acute turmoil from 2022 to 2024. Dissanayake promised to use his electoral mandate to reform Sri Lanka’s economic and political structures to prevent a recurrence of a similar economic crisis. Yet beyond adhering to the IMF’s terms and conditions and tightening some anti-corruption regulations, much of the government’s broader reform agenda remains stalled. Three primary factors offer insight into the cause and consequences of this subpar performance: the risks associated with implementing reforms, tension between the JVP’s organizational nature and political character, and sensitive civil-military relations. 

A Stalled Reform Agenda  

In the run-up to the 2024 elections, Dissanayake promised to implement a series of reforms if the NPP was brought to power. These included combating corruption, reforming government institutions and the economy, improving living conditions, overhauling the taxation system, repealing the controversial Prevention of Terrorism Act (PTA) and the Online Safety Act, establishing independent prosecution and accountability mechanisms, and, most significantly, abolishing the executive presidency and its concentration of political power. These promises were made against the backdrop of a May 2023 IMF bailout that was negotiated by former president Ranil Wickremesinghe. Dissanayake agreed to continue with the loan agreement and meet its terms rather than seek to renegotiate it as the NPP had promised during the election campaign.

Of these promised reforms, Colombo has made the greatest progress in complying with IMF requirements and pursuing modest anti-corruption measures. Thanks to the IMF program and political stability since 2024, the Sri Lankan economy surpassed expectations, recording a 5 percent growth in its GDP in 2024. Its foreign exchange reserves stood at $6.5 billion in June 2026 despite nearly a 10 percent decline in tourism due to the Iran war. This relative stability has persisted despite limited foreign investment, which stood at $1.04 billion in 2025, of which $352 million is in equity and $692 million is in the form of debt instruments. Anti-corruption measures—such as the Proceeds of Crime Act (2025) to recover assets, a stronger asset declaration system, mandatory reporting of audit-detected corruption, and proactive enforcement—have also helped fuel Sri Lanka’s overall economic rebound.

But economic recovery and political consolidation have not led to delivery on other promised reforms. Though Dissanayake did abolish state-funded privileges for former presidents, he has failed to eliminate the executive presidency or repeal draconian security laws. In December 2025, Dissanayake’s Cabinet proposed the Protection of the State from Terrorism Bill to replace the PTA. (A supplementary gazette to this bill was presented in September 2026.) This bill is yet to pass the parliament, and it has kept intact several draconian PTA measures, such as prolonged pre-charge and pre-trial detention, as well as unchecked executive power to proscribe individuals and organizations without judicial oversight. Plans to overhaul the taxation system—admittedly a complex, technical, and time-consuming issue—and strengthen judicial independence remain confined within opaque committees with limited signs of visible progress. This raises the question of why a party with such a large mandate and economic stability has not moved more swiftly to deliver on its campaign promises.

There are two compelling reasons for the slow pace of reforms. First, sequencing matters. Delaying certain economic measures allows Dissanayake to postpone the changes until the country formally meets IMF requirements. Additionally, as long as the economy remains stable, there is little public political pressure to initiate large-scale reforms. As the end of the current IMF program approaches in 2027, Colombo will focus its administrative energies on renegotiating the terms to secure more support. Against this backdrop, it makes little sense to launch sweeping taxation and judicial reforms while existential financial negotiations are ongoing. This is especially true if there is no clear political cost to be paid for inaction, given the dismal state of the opposition parties. The outcome of Dissanayake’s negotiations with the IMF, along with the JVP’s political standing in 2027–2028, will determine the government’s appetite for reform. 

The second reason the JVP has failed to push reforms is more politically straightforward. The existence of the executive presidency was a significant grievance for the JVP when it was the opposition, but the party enjoys the position’s outsized authority now that it holds the reins of power. Dissanayake is experiencing a rare moment wherein a Sinhala-dominated Marxist-Leninist party has come to power in Sri Lanka through the ballot box. The fact that it enjoys electoral support in the Tamil-dominated north and east as much as in the Sinhala-dominated south and central Sri Lanka is a testament to its appeal as an alternative to the traditional, family-based parties plagued by years of anti-incumbency. The JVP has little incentive to dilute the most powerful executive instrument to deliver on promises midway through its tenure, even if doing so was a core manifesto promise.

The JVP: Marxist-Leninist Core, Social Democratic Face

The NPP is a coalition of nearly twenty founding constituents that range from labor unions and collectives to the Sri Lanka Communist Party–Alternative Group. The JVP is the organizational and political core of this coalition, despite being a small cadre-based party with a history of anti-state militant activism during the 1970s and 1980s. It rose to power with an unexpectedly large mandate and knit together a coalition of multiple constituent parties, the latter of which has generated an underappreciated pressure to govern with caution and conservatism without rocking the proverbial boat. This caution has not only slowed reforms that could prove politically or socially disruptive, it has also begun to create a breach between the JVP’s organizational and ideological nature and its moderate political character.

The JVP’s political pragmatism is fundamental to its national and international appeal. Dissanayake’s popularity, coupled with the JVP’s moderation on Sri Lanka’s religious and ethnic fault lines, affords the party a social democratic demeanor that is less strident than its Marxist-Leninist underpinnings. For Jayadeva Uyangoda, a senior political scientist and former JVP leader, such a shift is more than tactical: “It was a decision taken by the politburo, and the JVP has transformed itself into a social democratic party.”1

Yet the way the Dissanayake government operates reveals a different side of the party. Almost all government decisions are taken by the JVP’s politburo, not by the president’s office alone. “There is no difference between the party and the government,” Uyangoda says.2 Led by party General Secretary Tilvin Silva, the six-member politburo includes Dissanayake (leader), Vijitha Herath (information secretary), K.D. Lalkantha (administrative secretary), Bimal Rathnayake (national organizer), and Sunil Handunneththi (financial secretary). Lalkantha, who is also a cabinet minister of agriculture, livestock, lands, and irrigation, recently claimed that “we have the government’s power, but we must continue our struggle to capture state power. Only then will our struggle be complete, in a way.”

The Marxist-Leninist nature of the JVP works against its social democratic character, and the tension that this creates is beginning to surface. Many members of the NPP who do not belong to the JVP are either joining the party to feel like an “insider” or the “real deal” or are becoming disillusioned with the JVP’s dominance. Some fear that Dissanayake, the popular president, has ceded too much authority to the more senior party figure Tilvin Silva, creating a parallel power center that is more assertive and committed to Leninism than to social democracy. Arguably, if the politburo is the principal decisionmaking body, then the general secretary could be perceived as being more powerful within the party’s hierarchy and method of operations than Dissanayake, the designated party leader.

Inspired by the “democratic” characteristics of China’s political system, Silva publicly stated last year that the NPP needs to be “in power for 15, 20 or 25 years . . . to [be able to] take the country forward under one vision, one policy framework.” He was quick to emphasize JVP’s continued embrace of electoral politics, but his remarks, his participation in government decisionmaking, and JVP’s inaction to abolish the executive presidency have collectively raised concerns about JVP’s ambition to turn Sri Lanka into a one-party state. “These are the early signs of what is to come . . . the JVP will show its true ideological colours in its second term when it is more experienced and more secure in power,” says Paikiasothy Saravanamuttu, founder and executive director of the Centre for Policy Alternatives.3

This debate between an elected presidency and a politburo of a Marxist-Leninist party helps explain why Dissanayake is incentivized to keep the executive presidency intact. In addition to diluting an executive instrument that is helping Dissanayake deliver a modicum of prosperity, the presidency also helps him balance Silva’s power in the politburo. Dissanayake’s popularity and moderation are powerful assets for the JVP and could give him leverage in the event of an internal party split if the situation deteriorates. The JVP has experienced several splits in the past, including the 2008 Sinhala-nationalist breakaway faction of ten parliamentarians who created the National Freedom Front and the 2011–2012 split of ultra-Marxists who formed the Frontline Socialist Party.

In 2015, when Dissanayake succeeded Somawansa Amarasinghe as party leader, the latter left the JVP to create a separate political outfit. To put this in perspective, Silva has been party secretary since 1995. Known as “Tilvin Ayya” (elder brother), Silva has considerable hold over the JVP’s rank and file, but it is unclear how he will use his influence to steer the government and what pressures it might create within the party. Regardless of the opacity surrounding his precise role, the JVP politburo’s emergence as a parallel power center is raising concerns among observers. From renegotiating the IMF loan and abolishing the executive presidency to changing the tax laws and enabling judicial independence, the JVP politburo’s concept of power and how to exercise it remains at odds with the Dissanayake government’s social democratic character. If, for instance, Sri Lanka enters another crisis cycle—likely if structural reforms beyond the IMF’s short-term remedies are not implemented—the NPP’s reaction to public protests could prove truer to the party’s original, coercive, Marxist-Leninist charter than to its more recent embrace of social democracy.

Civil-Military Relations and the Tamil Question

Civil-military relations remain sensitive in Sri Lanka’s post-2022 social contract. Though civilian control over the military makes it unambiguous that the president holds the defense portfolio, the NPP has been reluctant to directly challenge the military. The most important fault line concerns accountability for human rights violations during the 2009 civil war. Since the last general election, there has been little movement on this issue from the Sri Lankan government. The October 2025 Resolution 60/1 of the UN Human Rights Council (UNHRC) underscores the need to hold those who committed human rights violations and carried out extrajudicial killings to account. The NPP government has been cautious not to push this cause too strongly for fear of upsetting a fragile civil-military equilibrium. Dissanayake has pressed the army to return private land to Tamil citizens in the north and east but has achieved only limited success.

The civil-military balance in Sri Lanka is tied not just to wartime abuses and their aftermath, but also the issue of political autonomy for Sri Lankan Tamils and the devolution of policing and land powers. The Thirteenth Amendment to the Sri Lankan constitution, adopted in November 1987 under Indian pressure and a raging Tamil insurgency, is a constitutional reform that promised devolution of powers, created nine provincial councils, and devolved certain powers such as education, health, agriculture, housing, local government, and roads from the center to the provinces. Crucially, it also recognized Tamil as an official language alongside Sinhala and established English as a link language. Yet the amendment has still not been fully implemented.

In 2024, the NPP’s election manifesto promised a new constitution that incorporates devolution and equality for Sri Lanka’s Tamil communities. Dissanayake reaffirmed that commitment in August 2026 to Tamil and Muslim political parties. But the details of the promised new constitution, the specific nature of devolution, and the timing of provincial council elections are not forthcoming. Of all the provisions contained in the Thirteenth Amendment, only some have been implemented. Tamil is now recognized as an official language, and English as a link language. But access to Tamil translation for the police, courts, and government administration remains uneven. Provincial councils exist on paper, but they have been dormant for nearly a decade. The central government retains command over policing, land, and finance, even though ordinary public services such as schools, roads, hospitals, and housing have seen increased local leadership. Such partial implementation of the amendment helps preserve the power of armed forces in Tamil areas, weakens elected civilian institutions in the northern and eastern provinces, and keeps Sri Lanka’s civil-military balance in favor of civilian leadership in Colombo. 

The NPP has nevertheless initiated greater scrutiny of security agencies by following through on the prosecution of security officials tied to the previous government. The arrest of former military-intelligence and State Intelligence Service chief, Major General (Retd.) Suresh Sallay for allegedly aiding and abetting the 2019 Easter Sunday suicide bombers that left 270 people dead including forty-five children serves as a case in point. Separate to the Sallay investigation, Sri Lanka’s High Court recently convicted fifteen men over the bombings. The attacks created a climate of fear that helped Rajapaksa win the 2019 presidential elections on the platform centered on national security. Sallay is said to be aligned with the Rajapaksa family and allegedly helped mastermind the attack in order to mobilize public support for Rajapaksa. From the NPP’s perspective, the arrest of Sallay among other accused has helped the government reinforce its credibility and deliver on the promise of accountability.

Foreign Policy and the Limits of Neutrality

Conversations in Colombo about foreign policy are relaxed, a reflection of the government’s attitude that “foreign policy is not a priority issue,” as argued by Saravanamuttu.4 The IRIS Dena incident was an acute but temporary test of Dissanayake’s determination to steer clear of great-power rivalry in and around Sri Lanka. For now, Colombo’s neutrality is bearing fruit, and it suits regional and extra-regional powers such as India and China. But as Sri Lanka’s domestic politics evolve and geopolitical fault lines harden, that equilibrium could prove difficult to sustain. Sri Lankan foreign policy has swung before: The Rajapaksa government tilted in China’s direction in the 2010s, while the National Unity Alliance government led by Maithripala Sirisena moved closer to India and the West.

Today, Sri Lanka’s commitment to neutrality is driven by its economic circumstances and a post-2022 tacit geopolitical balancing act with three external powers. This balancing act consists of rebuilding strategic trust with India, managing China’s financial and strategic footprint, and containing Western pressure on human rights. Colombo adopted this strategy in response to the sobering reality that none of these powers immediately came to Sri Lanka’s rescue during the 2022 crisis. China’s refusal to alter the terms of its loans as Sri Lanka approached financial collapse contrasted with India’s eventual provision of $4 billion offer in relief, and the experience has had a profound impact on the Sri Lankan elite’s foreign policy beliefs and calculations. “There is a clear understanding in the society here that India will not let Sri Lanka go under,” Saravanamuttu adds.5 This is why the NPP, despite being traditionally anti-India and ideologically aligned with the Communist Party of China, built such strong ties with India. However, this foreign policy equilibrium could be disrupted if Sri Lanka faces renewed international pressure on human rights violations, another economic crisis, or major power military hostilities in the Indian Ocean vicinity.

Human Rights and Geopolitical Leverage

From Colombo’s perspective, the current equilibrium is both desirable and sustainable. But this could change if Colombo again faces pressure on its human rights record the way it has in the past. In the late 2000s and early 2010s, president Mahinda Rajapaksa’s decision to tilt in favor of China was, in part, driven by sustained Western and Indian pressure on human rights and also demands for accountability at the United Nations. As of today, neither Sri Lanka nor human rights are a priority of the administration of U.S. President Donald Trump. Sergio Gor, U.S. special envoy for South and Central Asian affairs, visited Sri Lanka in March 2026 to discuss trade and investment with Dissanayake, but he did not raise the issue of human rights. This relative disengagement contrasts sharply with Washington’s historic activist posture, including its diplomatic pressure on Colombo during Sri Lanka’s civil war and its coordination with India as a way of countering the Chinese footprint during the 2010s.

The erosion of liberal norms in the West and the UN’s reduced credibility means that Colombo faces far less external pressure to prioritize human rights than it once did. Even though European countries continue to press Colombo to account for excesses, this issue has lost some of its strategic significance. The UNHRC’s Resolution 60/1 underscores Colombo’s lack of action but does not hold sufficient political weight to alter the government’s behavior. For its part, China has never raised this issue at all. Beijing’s silence on what it views as Sri Lanka’s internal affairs helped China build political and strategic capital in Colombo during the Rajapaksa years, culminating in a ninety-nine-year lease on the Hambantota port in 2017.

The only country that can seriously pressure Sri Lanka on the human rights issue is India. During the Rajapaksa years, New Delhi felt that Colombo was deliberately countering India by inviting Chinese investments. Colombo’s decision to allow the docking of a Chinese naval submarine and warship at the port of Colombo in 2014 was seen as crossing a red line for India’s security-strategic interests. During this period, India not only coordinated with the United States to pile pressure on Colombo at the UN over its dismal human rights record, but it also pressured Sri Lanka to fully implement the Thirteenth Amendment in coordination with Sri Lankan Tamil parties.

The Dissanayake government’s promise of holding provincial council elections is in keeping with the amendment, but full implementation remains a sensitive matter. The Thirteenth Amendment created provincial councils as a form of power sharing, but no provincial elections have been held since 2014. This has resulted in the governor, a presidential appointee, making decisions, thereby further undermining the idea of devolution of power. “NPP does not want New Delhi to be seen as the benefactor of Sri Lankan Tamils. It wants to take the political credit for holding the long-delayed provincial council elections as well as a new package of devolution, framed independent of the Indo-Lanka Accord and 13th amendment,” says Uyangoda.6 The combination of the amendment and human rights accountability offers India considerable leverage over Colombo. How New Delhi exercises such leverage is a political choice. In August 2026, Indian Foreign Secretary Vikram Misri visited Colombo and “called upon the Sri Lankan leadership to implement their commitment to hold Provincial Council elections at the earliest and to fully implement the Constitutional provisions of Sri Lanka to meet the aspirations of the Tamil people.” But Misri did not mention the Thirteenth Amendment directly and stopped short of imposing a timeline on when elections must occur. From India’s perspective, using this issue to exercise leverage risks undermining the strategic trust that has emerged between the two neighbors.

China and India: Competing Economic and Strategic Footprints

Another economic crisis or future military confrontation in the Indian Ocean between India and China or the United States and China could also disrupt Sri Lanka’s fragile balancing act Sri Lanka’s inability to overhaul its economic fundamentals is the biggest risk factor that could lead to another crash. Colombo needs to find ways to generate revenue that go beyond tourism, agriculture, and international remittances. Other than pushing Colombo to negotiate another IMF bailout, the next crisis would also raise the stakes for both Beijing and New Delhi, as they will be forced to rethink their overseas developmental strategies in Sri Lanka. As of now, China’s developmental footprint is more capital-intensive and concentrated in large physical assets, whereas India’s $7.5 billion worth of total assistance is more geographically dispersed and people-centered.

In addition to the construction and operation of the Hambantota port and the Colombo port city built on reclaimed land, China has also invested in the Colombo International Container Terminal. It built several expressways, financed and constructed the Mattala Rajapaksa International Airport, developed the Norochcholai/Lakvijaya coal power plant, and contributed to other smaller development projects. Most of these projects are in southern, Sinhala-dominated regions. In contrast, India’s projects have had a stronger imprint in the north: the reconstruction and upgrading of the Northern Railway; financing of smaller road and bridge projects in the north and east; funding support for the Palaly/Jaffna International Airport; developing the Sampur Solar project; financing the Indian Housing Project in northern, eastern, and plantation regions; and supporting other smaller projects. India is also helping with the refurbishment of the Kankesanthurai port in the north, developing the Colombo West International Terminal, and planning to develop the port city Trincomalee as an energy, industrial, and logistical hub.

Arguably, India’s people-centric strategy has generated more political dividends than China’s capital-intensive engagement. Beijing’s investments have not created much goodwill in Sri Lanka. Silva’s ideological and political admiration for China is not widely shared across Sri Lankan society, emphasizing the limited popular appeal of the JVP’s ideological orientation and the party’s reliance on Dissanayake’s mass appeal. In fact, an apparent increase in Chinese organized-crime activity, including a recent mafia-linked murder in Colombo, and Beijing’s decision to forgo support for Colombo in 2022 has further reduced China’s geopolitical appeal in Sri Lanka. To correct these perceptions, Beijing recently shared intelligence on several Chinese mafia syndicates operating in Sri Lanka and requested Colombo to crack down on such activities. Unless China steps in during a future crisis to support Sri Lanka as India did in 2022, it is unlikely to regain a foothold on the island the way India has. The two countries’ response to Cyclone Ditwah in 2026 is instructive: India offered Colombo a relief package of $450 million, including $100 million in grants and the remainder provided through concessional credit lines. By contrast, China only offered $1 million in emergency cash assistance coupled with disaster relief worth RMB 1 million (approx. $148,959) through the party-to-party channel. The Red Cross Society of China topped this with another $100,000 in special aid funds. Given these shifting realities, another economic crisis would likely push Colombo further toward India, not China.

Lastly, as the sinking of IRIS Dena demonstrated, there is certainly a chance of military hostilities between major powers in the Indian Ocean in the coming years. If such a naval clash occurs, it could significantly dislocate Colombo’s triple lock. Any kinetic conflict between China and India or the United States and China in or near Sri Lankan waters would make it far harder for Colombo to avoid choosing sides. Colombo avoided such a trade-off during the 2026 Iran war when it refused an Iranian request to host three Iranian naval vessels for a goodwill visit and rejected an American request to land two fighter jets at the Mattala airport. However, if the combatants in a future conflict include either China or India, Colombo’s adherence to neutrality will be difficult to sustain.

In this respect, the 2025 India-Sri Lanka defense memorandum of understanding and the visit of Indian Defense Minister Rajnath Singh to Colombo in September, the first of its kind in nearly four decades, offers clues. While falling far short of establishing a military alliance, the agreement signals Sri Lanka’s general tilt in favor of India and the West on the security-strategic affairs of the Indian Ocean Region (IOR). Colombo has effectively and indefinitely paused visits by Chinese research vessels, or “spy ships,” to Sri Lankan ports. In March 2026, it refused the request of Chinese research vessel Shi Yan 6 to enter its territorial waters. Such caution on sensitive security-strategic issues demonstrates Colombo’s carefully calibrated balancing act vis-à-vis China, which remains an important economic partner.

Conclusion: A Fragile Balance 

Sri Lanka has come a long way from the 2022 Aragalaya protests. Its economy is showing signs of revival, and its polity is stable under the leadership of Dissanayake. The IMF loan, coupled with financial support from India, has helped Sri Lanka weather a troubled economic patch. The sinking of the IRIS Dena by the U.S. Navy in March tested Sri Lanka’s foreign policy principles, but Colombo maintained a neutral posture without provoking either Iran or the United States. The duration of this phase of stability will depend on whether the NPP’s failure to deliver promised structural reforms triggers another economic crisis in the coming years and on the direction of negotiations with the IMF in 2027. The tension between the JVP’s Marxist-Leninist nature and social democratic character could also play out differently if the economy comes under greater strain. The government’s current moderation on ethnic and social fault lines could pave the way for a more coercive Marxist-Leninist style of governance.

On the foreign policy front, Sri Lanka’s neutrality rests on a balancing act with its three principal external partners: India, China, and the United States. If relations between these three powers deteriorate to the point of military hostilities in the IOR, the equilibrium could collapse and push Sri Lanka to pick sides. But, absent such a confrontation, Sri Lanka is likely to maintain its position of engaging with China economically while limiting Beijing’s strategic footprint on the island. In contrast, it will widen and deepen relations with India on both economic and strategic fronts. India, for its part, is likely to continue supporting Colombo, even if it fails to implement the Thirteenth Amendment fully in Tamil areas, provided Sri Lanka does not allow China to use its territory and ports to undermine India’s security-strategic interests. That strategic logic may endure even if the JVP takes a more coercive, one-party turn. 

About the Author

Avinash Paliwal
Avinash Paliwal

Nonresident Scholar, South Asia Program

Avinash Paliwal is a nonresident scholar in the Carnegie South Asia Program. He is also a reader in international relations at SOAS University of London. His research focuses on India’s foreign and security policies, and the strategic affairs of South Asia and the Indian Ocean region.

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