India and Japan to Provide Sri Lanka in Economic Reconstruction, Sri Lanka Urges Trilateral Partnership

By: Asia Business Outlook Team | Friday, 11 August 2023

As active and vital middle powers in the Indo-Pacific region, India and Japan's partnership for project-specific support in Sri Lanka is significant, and with their proven experience, knowledge, and expertise in tackling specific development challenges, both countries could support Sri Lanka financially and technically, according to a report released by the Pathfinder Foundation, a prominent Colombo-based think tank.

The report, titled "Medium and Long-Term Strategy for Indo-Japanese Collaboration to Support Sri Lanka's Economic Transformation," was released here on Aug 10 in collaboration with two prominent New Delhi think tanks, NATSTRAT and Vivekananda International Foundation, as well as the Confederation of Indian Industry.

Given its geographical proximity and current "Neighbourhood First" policy, India is a natural trade and investment partner for Sri Lanka. Japan has a long history of cooperation with the country that provides development assistance. According to the report, "a vulnerable developing country like Sri Lanka can use tripartite cooperation to signal its specific demands more efficiently, thereby increasing opportunities for joint projects."

The report identifies four broad areas of tripartite cooperation: low-carbon power generation in Sri Lanka; development of Trincomalee as an energy hub; logistics and connectivity; and people-to-people contact.

Addressing the launch of the report Japanese Ambassador to India Hiroshi Suzuki said that India’s issuance of financing assurances to Sri Lanka at the time of its economic crisis was instrumental in accelerating the process of Sri Lanka’s debt restructuring and that it appreciates India’s engagement and forward-looking approach on the issue.