Courtesy: Indian Navy Website
The India–Sri Lanka Free Trade Agreement (ISFTA), implemented in 2000, has significantly expanded India–Sri Lanka trade, investment and tourism. But it now needs to be deepened beyond goods to make the most of the modern, supply-chain-driven global economy. Any ISFTA 2.0 should update rules of origin, liberalise services, digitise customs, strengthen investment protections and deepen connectivity to help Sri Lanka integrate into India-centred supply chains.
Courtesy: FB / @The Statesman
India’s Vice President C. Radhakrishnan visited Sri Lanka from April 19-20, reaffirming Colombo’s importance in India’s Neighbourhood First Policy and MAHASAGAR vision. While ties remain stable, legacy issues persist: Tamil demands for devolution, illegal fishing disputes, and the stalled Economic and Technology Cooperation Agreement. The hope is for these to be resolved within Sri Lanka; till then, the unresolved challenges will continue to test the depth and durability of the bilateral.
Courtesy: Reuters
Outcomes of the Neighbourhood First policy (NFP) are often mixed, shaped by actions on both sides. Recent engagements with Bangladesh, Myanmar, Sri Lanka, and Nepal suggest an opportune moment to recalibrate NFP, enhance its effectiveness, and bridge perceptions of India as an “elder brother” rather than a “big brother.”
Courtesy: AFR
The Persian Gulf conflict has already impacted India’s oil imports and financial security. However, India has not created meaningful options to protect itself from oil shocks over the last decade – and such shocks will continue. Now is the time for India to make equity investments in oil and gas companies in stable economies like the U.S., Canada and Australia, to protect itself from future energy crises.
Courtesy: MSN
The war in the Persian Gulf has already caused significant disruption in India’s South Asian neighbours. A prolonged conflict is likely to push the region back into economic and political crises from which it had been hopeful of emerging this year.
Courtesy: Gateway House
On January 7, 2026, the U.S. government announced its withdrawal from 31 UN organisations. This is a shock to the UN system. Several other countries have halted or only partially paid their dues over the years, creating a major funding gap. To cover for it, the UN has turned to “voluntary contributions” which come from philanthropic and private actors. Their misaligned mandates are distorting UN priorities.
Courtesy: High Commission of India, Colombo
Cyclone Ditawah has put a serious dampener on Sri Lanka’s rosy post-budget economic outlook. Sri Lanka can help itself by using available national resources, but India can help too, by partnering with multilateral development banks to manage the post-Cyclone Ditwah reconstruction implementation strategy. It can also share its experience of implementing gradual economic reforms and policy planning under Niti Ayog to support Sri Lanka’s efforts.
Courtesy: Sri Lanka PMD
After a remarkable recovery from a very deep crisis in 2022, Sri Lanka’s recent budget for 2026 consolidates economic stabilisation and introduces a few markers for further growth. But more needs to be done to embed a growth strategy and transform its economy to avoid further IMF austerity programmes.
Courtesy: Gateway House
A slowdown of the Chinese economy, and the shift, particularly by MNCs, from China to other more competitive locations has opened up business opportunities for latecomers to supply chains in the developing world. Evidence suggests that Southeast Asia and some South Asian countries like India, Sri Lanka, Bangladesh, could be beneficiaries of the supply chain shift, particularly in labour-intensive segments.
Courtesy: New Spotlight Magazine
Building a robust engagement with India on energy can help offset some of the economic and political crises that most of India’s neighbours are facing. Smaller South Asian neighbours will benefit from cheaper electricity and oil, paving the way for greater regional economic cooperation.