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ISFTA: The India-Sri Lanka Free Trade Agreement (ISFTA) in 2000 contributed significantly towards the expansion of trade in areas such as infrastructure, connectivity, transportation, housing, health, livelihood and rehabilitation, education, and industrial development.Bilateral Cooperation: A joint statement covering all areas of bilateral cooperation, titled ‘MitratvaMaga’ was issued following the Virtual Summit of 2020.Regular Exchange: Political relations between the two countries have been marked by high-level exchanges of visits at regular intervals.The result was that the LTTE now found itself engaged in military conflict with the Indian Army.Īreas of cooperation (1) Political Relations The accord failed over the issue of representations.Further India was to send a peacekeeping force, named the IPKF to Sri Lanka to enforce the disarmament and to watch over the regional council.The peace accord assigned a certain degree of regional autonomy in the Tamil areas with a body controlling the regional council and called for the Tamil militant groups to lay down their arms.India has signed a nuclear energy deal to improve relations and made a nuclear energy pact with Sri Lanka in 2015.In recent years Sri Lanka has moved closer to China, especially in terms of naval agreements.The India- SL relations have been however tested by the Sri Lankan Civil War and by the controversy of Indian intervention during the war.There are deep racial and cultural links between the two countries.India is the only neighbor of Sri Lanka, separated by the Palk Strait both nations occupy a strategic position in South Asia and have sought to build a common security umbrella in the Indian Ocean.
Continuous borrowing: Fears of a sovereign default rose by the end of 2021, with the country’s foreign reserves plummeting to $1.6 billion, and deadlines for repaying external loans looming.It put wide import restrictions to save dollars which in turn led to consequent market irregularities and reported hoarding. Food hoarding: The government declared emergency regulations for the distribution of essential food items.Ill-advised policies: It included the government’s abrupt switch to organic farming -widely deemed “ill-advised”, further aggravated the problem.No strategy: The lack of a comprehensive strategy to respond to the crisis then was coupled with certain policy decisions last year.Forex decline: It meant that all key foreign exchange earning sectors, such as exports and remittances, along with tourism, were brutally hit.Domestic job losses: Thousands of youth lost their jobs in cities as establishments abruptly sacked them or shut down.Shut-down: Garment factories and tea estates could not function, as infections raged in clusters.In-migration: Thousands of Sri Lankan laborers in West Asian countries were left stranded and returned jobless.The first wave of the pandemic in 2020 offered early and sure signs of distress. Sri Lanka’s economic crisis is aggravating rapidly, putting citizens through enormous hardship.
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