Features | Diplomacy | South Asia

Sri Lanka Is Now India’s Best – and Maybe Last – Friend in South Asia

Swift support in times of crisis has made the nation one of New Delhi’s few remaining close partners in the region.

Sri Lankan President Anura Kumara Dissanayake shakes hands with Indian Prime Minister Narendra Modi outside the Presidential Secretariat in Colombo during the latter’s visit to Sri Lanka, April 5, 2025.

For much of the post-independence period, India viewed South Asia as its natural sphere of influence. Its size, economic weight, and military strength gave New Delhi a decisive role in shaping the region’s political and security dynamics, with relatively little external challenge. That strategic comfort, however, has steadily faded. Over the past two decades, China’s sustained engagement with smaller South Asian states has significantly altered regional dynamics. Its role has introduced competition where India once faced little resistance. 

India’s relations with several of its neighbors have become more complicated – and, in some cases, openly strained. New Delhi has been forced to reassess which partnerships it can genuinely rely on and leverage when needed. In this changing landscape, Sri Lanka – India’s “age-old” friend – has assumed renewed importance: it is no longer seen merely as a neighbor, but as a strategic necessity. 

Despite periods of economic stress and political transition, ties between Colombo and New Delhi have remained largely cordial, enabling cooperation to continue, particularly in moments of crisis. This was evident in India’s swift and visible support during Sri Lanka’s 2022 economic crisis, and more recently in its response to Cyclone Ditwah under Operation Sagar Bandhu.

Cyclone Ditwah in November 2025 was Sri Lanka’s second-deadliest natural disaster after the 2004 tsunami. It claimed 643 lives, left 211 people missing, and affected over 2.18 million people – nearly 10 percent of the country’s population. Over 286,000 people were internally displaced, more than 75,000 homes were damaged, and approximately 250,000 hectares of paddy land were destroyed or severely impacted. With estimated direct economic losses of $4.1 billion and roughly 16 percent of GDP at risk, the scale of the crisis demanded an immediate and capable response from both the Sri Lankan government and its foreign allies. 

India as Sri Lanka’s First Responder

Operation Sagar Bandhu was India’s coordinated humanitarian and recovery response to Cyclone Ditwah in late November 2025. It combined naval, air, engineering, and financial support in a phased manner, moving rapidly from emergency relief to reconstruction.

India began operations within days of the cyclone, deploying naval assets to Colombo and opening a dedicated maritime supply corridor from southern India. This ensured uninterrupted delivery of relief items to affected regions, particularly in the Northern and Eastern Provinces. Air operations and medical assistance followed, supporting evacuations, logistics, and international coordination. By early 2026, the focus had shifted to restoring transport links and rebuilding critical infrastructure.

The operation concluded with a $450 million financial assistance package designed to support recovery without worsening Sri Lanka’s debt position, signaling India’s intent to provide support that was both immediate and sustainable.

Operation Sagar Bandhu demonstrated India’s capacity to act quickly, at scale, and across multiple domains, reinforcing its role as Sri Lanka’s most reliable first responder in a regional crisis.

India’s response highlighted its role as Sri Lanka’s most cordial and capable regional partner in a crisis – and this was not the first time. Time and again, New Delhi has stepped forward when Sri Lanka faced emergencies. This was most notable during the economic crisis of 2022.

On April 12, 2022, Sri Lanka announced the suspension of payments on its external debt, with foreign reserves at just $1.6 billion – barely enough to cover a month’s imports. Almost immediately, India, guided by its “Neighborhood First” policy, stepped in with nearly $4 billion in financial assistance. The Reserve Bank of India (RBI) extended a $400 million currency swap, along with $500 million in deferred trade liabilities under the Asian Clearing Union. Additional credit facilities from India’s Exim Bank and the State Bank of India – amounting to $1.55 billion – enabled Sri Lanka to continue importing essential items. 

Although India held a smaller share of the restructuring portfolio, it revised the structure of its 2022 financial support. The RBI’s $400 million currency swap and $2 billion in trade credit were consolidated into a $2.4 billion long-term currency arrangement. This eased immediate repayment pressures, extending the schedule from November 2024 to August 2026 and providing critical breathing space for Sri Lanka’s foreign reserves. It is also important to highlight that a significant portion of India’s 2022 emergency assistance, including $893 million in credit facilities, was excluded from restructuring.

Crucially, India was the first to provide the financing assurances required for the IMF program’s approval in March 2023. This early commitment reinforced the perception that India was ready to act decisively when its “partner and friend” needed support most.

This level of assistance naturally raises a question: Is it driven purely by humanitarian concerns and long-standing ties? Or is it simply because Sri Lanka is one of the few neighbors with whom India still enjoys truly cordial relations?

India and Its Other Neighbors: Strained Relationships

India’s ties with several other neighbors have deteriorated rapidly, in contrast to its relationship with Sri Lanka.

Ties with Bangladesh – India’s closest land neighbor – have been severely tested since the ouster of former Prime Minister Sheikh Hasina in August 2024. The interim government, led by Muhammad Yunus, shifted Dhaka’s foreign policy, increasing engagement with China and Pakistan. This marked a reversal of decades of Bangladeshi reliance on India, signaling a clear shift in strategic priorities.

Internal unrest in Bangladesh has further complicated the situation. The assassination of Sharif Osman Hadi, a key figure in the student movement that led to Hasina’s removal, intensified tensions. Although there is no evidence of Indian involvement, allegations by protesters that the killers fled to India fueled anti-India sentiment.

New Delhi’s refusal to extradite Hasina – now living in exile in India – despite repeated requests from Dhaka, has added to this friction, creating a diplomatic bind. Her death sentence for crimes against humanity remains effectively unenforceable, heightening tensions between the two neighbors over the past 16 months.

In Nepal’s case, the legacy of the 2015–16 economic blockade continues to shape bilateral relations with India. Widely perceived in Kathmandu as pressure exerted during Nepal’s constitutional transition, the episode exposed the country’s heavy dependence on Indian trade routes and essential supplies, leaving a lasting imprint on Nepal’s foreign policy thinking.

In response, Nepal moved to diversify its regional partnerships. In 2017, Kathmandu joined China’s Belt and Road Initiative (BRI), engaging Beijing on large-scale infrastructure and connectivity projects. This was aimed at reducing its reliance on India and mitigating the risk of similar disruptions in the future.

To the southwest, the Maldives exhibited a more dramatic shift in foreign policy. President Mohamed Muizzu’s rise to power was driven in large part by his “India Out” campaign, which framed India’s military presence as an infringement on Maldivian sovereignty. Following his election, Muizzu moved quickly to formalize the withdrawal of Indian military personnel, and by May 2024, the last Indian contingent had left the country.

Despite subsequent efforts to stabilize relations – including Prime Minister Narendra Modi’s visit in 2025 – Malé has continued to pursue a more balanced approach to its external partnerships. This reflects a clear intent to reduce its earlier dependence on India while keeping lines of engagement with New Delhi open.

Finally, India’s relations with Pakistan are at a historic low. Persistent border tensions, episodes of military escalation – including the four-day confrontation in May 2025 involving India’s Operation Sindoor and Pakistan’s Operation Bunyan-un-Marsoos – along with steadily declining diplomatic engagement, have left bilateral relations severely constrained. At the same time, Pakistan has continued to deepen its strategic alignment with China, further narrowing the space for any meaningful reset in India-Pakistan relations.

Ultimately, this leaves Sri Lanka as one of the few countries in South Asia – historically considered India’s backyard – with whom New Delhi continues to enjoy consistent and reliable relations. That reality underscores Colombo’s strategic importance to India.

What makes this even more significant is that, unlike India, which faces contentious ties with many of its neighbors, Sri Lanka has managed to maintain good relations across the region. Trusted by India and respected by other South Asian countries, this rare position gives Colombo a strategic advantage that few other countries can claim.

In a region defined by uncertainty, shifting alliances, and competing powers, Sri Lanka’s enduring partnerships are both a privilege and a responsibility. How Colombo chooses to use this advantage – whether as a passive recipient of support or an active architect of regional cooperation – will determine not only its influence and standing, but its ability to shape the future of South Asia. The real test now is whether Sri Lanka can translate crisis-time goodwill into a deliberate, long-term regional strategy.

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For much of the post-independence period, India viewed South Asia as its natural sphere of influence. Its size, economic weight, and military strength gave New Delhi a decisive role in shaping the region’s political and security dynamics, with relatively little external challenge. That strategic comfort, however, has steadily faded. Over the past two decades, China’s sustained engagement with smaller South Asian states has significantly altered regional dynamics. Its role has introduced competition where India once faced little resistance. 

India’s relations with several of its neighbors have become more complicated – and, in some cases, openly strained. New Delhi has been forced to reassess which partnerships it can genuinely rely on and leverage when needed. In this changing landscape, Sri Lanka – India’s “age-old” friend – has assumed renewed importance: it is no longer seen merely as a neighbor, but as a strategic necessity. 

Despite periods of economic stress and political transition, ties between Colombo and New Delhi have remained largely cordial, enabling cooperation to continue, particularly in moments of crisis. This was evident in India’s swift and visible support during Sri Lanka’s 2022 economic crisis, and more recently in its response to Cyclone Ditwah under Operation Sagar Bandhu.

Cyclone Ditwah in November 2025 was Sri Lanka’s second-deadliest natural disaster after the 2004 tsunami. It claimed 643 lives, left 211 people missing, and affected over 2.18 million people – nearly 10 percent of the country’s population. Over 286,000 people were internally displaced, more than 75,000 homes were damaged, and approximately 250,000 hectares of paddy land were destroyed or severely impacted. With estimated direct economic losses of $4.1 billion and roughly 16 percent of GDP at risk, the scale of the crisis demanded an immediate and capable response from both the Sri Lankan government and its foreign allies. 

India as Sri Lanka’s First Responder

Operation Sagar Bandhu was India’s coordinated humanitarian and recovery response to Cyclone Ditwah in late November 2025. It combined naval, air, engineering, and financial support in a phased manner, moving rapidly from emergency relief to reconstruction.

India began operations within days of the cyclone, deploying naval assets to Colombo and opening a dedicated maritime supply corridor from southern India. This ensured uninterrupted delivery of relief items to affected regions, particularly in the Northern and Eastern Provinces. Air operations and medical assistance followed, supporting evacuations, logistics, and international coordination. By early 2026, the focus had shifted to restoring transport links and rebuilding critical infrastructure.

The operation concluded with a $450 million financial assistance package designed to support recovery without worsening Sri Lanka’s debt position, signaling India’s intent to provide support that was both immediate and sustainable.

Operation Sagar Bandhu demonstrated India’s capacity to act quickly, at scale, and across multiple domains, reinforcing its role as Sri Lanka’s most reliable first responder in a regional crisis.

India’s response highlighted its role as Sri Lanka’s most cordial and capable regional partner in a crisis – and this was not the first time. Time and again, New Delhi has stepped forward when Sri Lanka faced emergencies. This was most notable during the economic crisis of 2022.

On April 12, 2022, Sri Lanka announced the suspension of payments on its external debt, with foreign reserves at just $1.6 billion – barely enough to cover a month’s imports. Almost immediately, India, guided by its “Neighborhood First” policy, stepped in with nearly $4 billion in financial assistance. The Reserve Bank of India (RBI) extended a $400 million currency swap, along with $500 million in deferred trade liabilities under the Asian Clearing Union. Additional credit facilities from India’s Exim Bank and the State Bank of India – amounting to $1.55 billion – enabled Sri Lanka to continue importing essential items. 

Although India held a smaller share of the restructuring portfolio, it revised the structure of its 2022 financial support. The RBI’s $400 million currency swap and $2 billion in trade credit were consolidated into a $2.4 billion long-term currency arrangement. This eased immediate repayment pressures, extending the schedule from November 2024 to August 2026 and providing critical breathing space for Sri Lanka’s foreign reserves. It is also important to highlight that a significant portion of India’s 2022 emergency assistance, including $893 million in credit facilities, was excluded from restructuring.

Crucially, India was the first to provide the financing assurances required for the IMF program’s approval in March 2023. This early commitment reinforced the perception that India was ready to act decisively when its “partner and friend” needed support most.

This level of assistance naturally raises a question: Is it driven purely by humanitarian concerns and long-standing ties? Or is it simply because Sri Lanka is one of the few neighbors with whom India still enjoys truly cordial relations?

India and Its Other Neighbors: Strained Relationships

India’s ties with several other neighbors have deteriorated rapidly, in contrast to its relationship with Sri Lanka.

Ties with Bangladesh – India’s closest land neighbor – have been severely tested since the ouster of former Prime Minister Sheikh Hasina in August 2024. The interim government, led by Muhammad Yunus, shifted Dhaka’s foreign policy, increasing engagement with China and Pakistan. This marked a reversal of decades of Bangladeshi reliance on India, signaling a clear shift in strategic priorities.

Internal unrest in Bangladesh has further complicated the situation. The assassination of Sharif Osman Hadi, a key figure in the student movement that led to Hasina’s removal, intensified tensions. Although there is no evidence of Indian involvement, allegations by protesters that the killers fled to India fueled anti-India sentiment.

New Delhi’s refusal to extradite Hasina – now living in exile in India – despite repeated requests from Dhaka, has added to this friction, creating a diplomatic bind. Her death sentence for crimes against humanity remains effectively unenforceable, heightening tensions between the two neighbors over the past 16 months.

In Nepal’s case, the legacy of the 2015–16 economic blockade continues to shape bilateral relations with India. Widely perceived in Kathmandu as pressure exerted during Nepal’s constitutional transition, the episode exposed the country’s heavy dependence on Indian trade routes and essential supplies, leaving a lasting imprint on Nepal’s foreign policy thinking.

In response, Nepal moved to diversify its regional partnerships. In 2017, Kathmandu joined China’s Belt and Road Initiative (BRI), engaging Beijing on large-scale infrastructure and connectivity projects. This was aimed at reducing its reliance on India and mitigating the risk of similar disruptions in the future.

To the southwest, the Maldives exhibited a more dramatic shift in foreign policy. President Mohamed Muizzu’s rise to power was driven in large part by his “India Out” campaign, which framed India’s military presence as an infringement on Maldivian sovereignty. Following his election, Muizzu moved quickly to formalize the withdrawal of Indian military personnel, and by May 2024, the last Indian contingent had left the country.

Despite subsequent efforts to stabilize relations – including Prime Minister Narendra Modi’s visit in 2025 – Malé has continued to pursue a more balanced approach to its external partnerships. This reflects a clear intent to reduce its earlier dependence on India while keeping lines of engagement with New Delhi open.

Finally, India’s relations with Pakistan are at a historic low. Persistent border tensions, episodes of military escalation – including the four-day confrontation in May 2025 involving India’s Operation Sindoor and Pakistan’s Operation Bunyan-un-Marsoos – along with steadily declining diplomatic engagement, have left bilateral relations severely constrained. At the same time, Pakistan has continued to deepen its strategic alignment with China, further narrowing the space for any meaningful reset in India-Pakistan relations.

Ultimately, this leaves Sri Lanka as one of the few countries in South Asia – historically considered India’s backyard – with whom New Delhi continues to enjoy consistent and reliable relations. That reality underscores Colombo’s strategic importance to India.

What makes this even more significant is that, unlike India, which faces contentious ties with many of its neighbors, Sri Lanka has managed to maintain good relations across the region. Trusted by India and respected by other South Asian countries, this rare position gives Colombo a strategic advantage that few other countries can claim.

In a region defined by uncertainty, shifting alliances, and competing powers, Sri Lanka’s enduring partnerships are both a privilege and a responsibility. How Colombo chooses to use this advantage – whether as a passive recipient of support or an active architect of regional cooperation – will determine not only its influence and standing, but its ability to shape the future of South Asia. The real test now is whether Sri Lanka can translate crisis-time goodwill into a deliberate, long-term regional strategy.

Shaheen Abdul Gani is a research assistant at Arutha Research. Her work focuses on China–Sri Lanka debt relations and Sri Lankan macroeconomic policy, particularly in the context of the country’s 2022 economic crisis. Her broader research interests include green finance and social protection. She holds a BA (Hons) in International Relations from the University of Nottingham.

Charuka Peiris is a program and research officer at Arutha Research. His work focuses on public policy, foreign policy, and economic governance, with research interests in governance and gender. He holds a BA in International Studies from the University of Kelaniya and an MSc in International Relations from Liverpool John Moores University.

India neighborhood diplomacy

India-Sri Lanka relations

Sri Lanka economic crisis

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