Sri Lanka, India look to develop investment ties as China tightens grip on island nation

Amid the recent speculations over Chinese investment in the island nation, both India and Sri Lanka are working on developing an understanding to have certain 'red lines' which none of them would cross, said Sri Lanka envoy Asoka Milinda Moragoda on Wednesday. 

Speaking in a virtual interactive session organised by the Gandhinagar-based Rashtriya Raksha University, Sri Lanka’s High Commissioner to India Milinda Moragoda said that a dialogue with the Indian government holds significance for the development of trust and understanding between both countries in concern to China's presence in the island nation. Further speaking on it, he said that no security presence from the Chinese government is there in Sri Lanka and also India has never told it to reject Chinese investments. 

"Given the context of a power play in Sri Lanka, the presence of the Chinese footprint can be seen as a different perspective. However, our dialogue with India is important for building trust and understanding each other and maybe have some sort of red lines which both sides will not cross", he said. 

Adding more to China's investment, Moragoda said that China as being one of the biggest investors in the world today is vital for Sri Lanka. "As long as the investment does not create any strategic issues in India, we will continue to entertain the investment", he added. 

Chinese intervention draws a major jolt to India's investment plans in Sri Lanka

What seemed to be a major jolt to India's investment plans in Sri Lanka, the Rajapaksha government had earlier scrapped a deal signed with the Indian government for developing the East Container Terminal (ECT) at the Colombo Port in collaboration with India and Japan. However, later the deal was scrapped stating that it will be a wholly-owned container terminal of the Sri Lanka Ports Authority and it would instead develop the West Container Terminal (WCT). Later, the contract was clinched by the Chinese government adding much displeasure for India and Japan. 

Speaking on this, the Sri Lankan envoy also said that the investment by a Chinese company is a commercial proposition of investment even as 70% of the 80% of cargo coming to Sri Lanka is being transshipped goes to India.

Image: AP/PTI