Why in News:
With a joint statement on economic cooperation, India and Sri Lanka outlined a forward-looking vision for their relations.

How are Relations between India and Sri Lanka?  
India and Sri Lanka are two South Asian nations located in the region of the Indian Ocean. Sri Lanka is geographically situated just off the southern coast of India, separated by the Palk Strait.
This proximity has significantly influenced the relationship between the two nations.
The Indian Ocean is a vital waterway for trade and military operations, and Sri Lanka's location at the crossroads of main shipping lanes makes it a crucial point of control for India.

Relations:  
India and Sri Lanka have a lengthy history of cultural, religious, and commercial ties extending back to antiquity.
There are significant cultural ties between the two nations, with many Sri Lankans having Indian ancestry. Buddhism, a religion with origins in India, is also significant in Sri Lanka.
Economic ties: India is Sri Lanka's third greatest export market after the United States and the United Kingdom. Over sixty percent of Sri Lanka's exports are aided by the India-Sri Lanka Free Trade Agreement. Additionally, India is a significant investor in Sri Lanka.
From 2005 to 2019, Foreign Direct Investment (FDI) from India amounted to approximately USD 1.7 billion.
India and Sri Lanka execute a joint military (Mitra Shakti) and naval (SLINEX) exercise for defense purposes.
Participation in Groupings: Sri Lanka is also a member of the India-led BIMSTEC (Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation) and SAARC.
  
Issues in India-Sri Lanka Relations:
Killing of Fishermen: The killing of Indian fishermen by the Sri Lankan Navy continues to be a contentious issue between these two countries.
In 2019 and 2020, the Sri Lankan government will arrest a total of 284 Indian fishermen and confiscate 53 Indian vessels.
Effects of China: The swiftly expanding economic footprint and political influence of China in Sri Lanka is straining relations between India and Sri Lanka.
China is the largest investor in Sri Lanka, accounting for 23.6% of total Foreign Direct Investment (FDI) during 2010-2019, compared to India's 10.2%.
 
India-Srilanka relations and 13th Amendment:
The Tamil National Alliance (TNA) “categorically rejected” Sri Lankan President Ranil Wickremesinghe’s offer to implement the 13th Amendment sans police powers, terming his proposal for development and power devolution “another hollow promise”.
The 13th Amendment is an over 30-year old Sri Lankan legislation on the devolution of power from Colombo to the nine provinces, but has never been fully implemented.
It is a result of the Indo-Lanka Accord, which was signed in July 1987 by President J.R. Jayawardene and then-Prime Minister Rajiv Gandhi in an effort to end the ethnic conflict between the armed forces and the Liberation Tigers of Tamil Eelam, the organization that spearheaded the Tamils' fight for self-determination and sought a separate state in Sri Lanka. 
In 1987, it was approved.
 In addition to making Tamil an official language and English a link language, it called for the establishment of provincial administrations around the nation. There are currently nine province councils.
Additionally, it aimed to address the Tamils' demand for self-determination, which by the 1980s had turned into a flaming political issue.
In order to grant all nine provinces in the nation—including those with a Sinhala majority—the freedom to self-govern, the Sri Lankan government agreed to a power-sharing framework.

Significance   
It is seen as one of the few notable victories during the 1980s, in the face of growing Sinhala-Buddhist majoritarianism since Sri Lanka gained independence in 1948, in addition to ensuring a certain amount of autonomy.
Once completely implemented, the provincial councils will have the authority to self-govern in regards to matters like law enforcement, housing, land use, agriculture, and education. 
All the communities in the island nation will be able to live in harmony thanks to it.

Why is it controversial?  
The 13th Amendment carries a heavy burden from the nation's civil war past. 
Both Sinhala nationalist parties and the LTTE vehemently opposed it.
In contrast to the Tigers, the former believed that there was insufficient authority to be shared. 
A significant portion of the Sinhala political establishment, particularly the left-nationalist Janatha Vimukthi Peramuna (JVP), which organized an armed uprising against it, viewed the Accord and the ensuing legislation as a legacy of Indian meddling. 
It was largely viewed as an imposition by a neighbor with hegemonic control, despite the fact that it was signed by the powerful President Jayawardene.
The 13th Amendment is not considered sufficient by the Tamil polity, particularly its dominant nationalist strain, either in terms of its scope or content. 
However, some, especially the Tamil National Alliance (TNA), saw it as a crucial beginning point and something to build upon. The TNA mostly represented the Tamils of the north and east in Parliament during the post-war era until its defeat in the most recent elections.

India's Attitude   
India has consistently promoted the island nation's political and economic stability.
India urged Sri Lanka to take the necessary actions to address the justifiable aspirations of the Tamil community, including by advancing the reconciliation process and putting the 13th Amendment to the Sri Lankan Constitution into effect, in order to guarantee that all of its citizens' basic freedoms and human rights are fully protected.
India views the entire 13th Amendment's implementation in Sri Lanka as "critical" to forging peace with the country's minority Tamil community.

 India’s support to Sri Lanka in overcoming its financial crisis  
Sri Lanka was hit by a catastrophic financial crisis in 2022, the worst since its independence from Britain in 1948, due to a severe paucity of foreign exchange reserves.
As the country struggled, locked in the throes of the crisis, India extended multi-pronged assistance of about $4 billion to it last year, through multiple credit lines and currency support, in line with India’s ‘Neighbourhood First’ policy.
India’s financial and humanitarian support worth $4 billion to Sri Lanka is far in excess of the total anticipated Extended Fund Facility of the IMF.
India has reiterated its willingness to play "a constructive role" in supporting Sri Lanka's efforts for recovery from the worst economic crisis.
India is the first creditor nation in January this year to convey the financing assurances needed to kick start the IMF process. India will continue to play a constructive role as a Co-Chair of the Creditors Committee along with Japan and the Paris Club.
Paris Club is a group of officials from major creditor countries whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by debtor countries.
India in January this year became the first country to hand over its letter of support for financing and debt restructuring of Sri Lanka to the International Monetary Fund (IMF).
In May this year, 17 countries that have extended loans to Sri Lanka formed an official creditor committee' co-chaired by India, Japan, and France, to discuss Sri Lanka’s request for debt treatment.

Recent bilateral talks and outcome:  
Bilateral talks between India and Srilanka held at the Hyderabad House where the two sides exchanged documents on cooperation in the field of animal husbandry, renewable energy, development projects in Trincomalee district in eastern Sri Lanka, and online payment services between the two sides. 
The MoU on Trincomalee is aimed at developing the port and its nearby areas as a Regional hub for industry, energy, including renewable energy. The agreement on digital transaction was signed between Lanka Pay and ECI International to facilitate acceptance of India’s Unified Payments Interface (UPI) in Sri Lanka. 
As of my last update in September 2021, the way forward for India and Sri Lanka relations was marked by various opportunities and challenges. The relationship between the two countries has historical, cultural, and economic ties, but it has also experienced occasional strains.

Here are some potential steps to improve and strengthen India-Sri Lanka relations:  
1. Economic Cooperation: Foster greater economic collaboration through bilateral trade agreements, investment opportunities, and joint ventures. Enhancing economic ties can lead to mutual benefits and increased prosperity for both nations.
2. Development Projects: India can continue supporting Sri Lanka's development initiatives, including infrastructure projects, capacity building, and technical assistance. These projects can help uplift Sri Lanka's economy and improve the living standards of its people.
3. Cultural Exchanges: Promote cultural exchanges between the two countries to deepen people-to-people connections. Cultural events, educational programs, and tourism exchanges can foster a better understanding and appreciation of each other's heritage and traditions.
4. Addressing Fishermen Issue: The recurring issue of fishermen straying into each other's territorial waters and subsequent arrests can be addressed through improved communication and joint patrolling. Establishing protocols for dealing with such incidents can prevent unnecessary tensions.
5. Maritime Security and Cooperation: Collaborate on maritime security to address issues like piracy and illegal fishing in the Indian Ocean region. This cooperation can contribute to regional stability and safeguard the interests of both countries.
6. Security and Counterterrorism Cooperation: Strengthen intelligence sharing and counterterrorism efforts to address security challenges faced by both countries. Working together to combat extremist elements can help ensure the safety and stability of the region.
7. Sustainable Development and Environmental Protection: Cooperate on sustainable development and environmental protection, particularly in the context of climate change and conservation of shared natural resources.
8. Respect for Sovereignty: Both countries should respect each other's sovereignty and territorial integrity. It is essential to avoid interference in each other's internal affairs and work towards mutual understanding and cooperation.
9. Resolution of Disputes: Address outstanding issues diplomatically and constructively. Disputes, if any, should be resolved through peaceful dialogue and in adherence to international law.
10. Regular High-Level Dialogues: Maintain regular high-level dialogues between leaders and officials of both countries to discuss and address any emerging issues and to strengthen bilateral ties.
It is important to note that the geopolitical landscape can change over time, and new challenges or opportunities may arise. Continuously engaging in constructive dialogue and cooperation can pave the way for a positive and sustainable future for India-Sri Lanka relations.

Mains Practice question:
  Q. If India wants to become a formidable player in global politics, it should grow along with its neighbors. Comment