PM Modi’s Sri Lanka visit signals big boost for bilateral energy, trade ties
Prime Minister Narendra Modi and Sri Lankan President Anura Kumara Dissanayake will jointly inaugurate a series of India-supported initiatives, including the landmark NTPC Sampur Solar Project.
• Adani’s port project in Sri Lanka may be inaugurated during Prime Minister Narendra Modi’s visit, potentially influencing the stalled Adani Green Energy projects in the north. Though withdrawn earlier over tariff disputes, the $1 billion renewable project remains under discussion.
Sri Lanka is marking a key milestone in energy and economic ties with India as Prime Minister NarendraModi begins his visit to the island nation from April 4 to 6, at the invitation of President Anura Kumara Dissanayake, according to Indian news magazine The Week.
Addressing parliament on March 21, President Anura Kumara Dissanayake said PM Modi’s visit aims to support Sri Lanka’s stability, with construction of the Sampur Power Plant set to begin during the visit.
Modi and Dissanayake will inaugurate several India-backed projects, including the solar power project between India’s National Thermal Power Corporation (NTPC) and Sri Lanka’s Ceylon Electricity Board (CEB) in Trincomalee. Replacing a planned coal plant, the two-phase project will generate 120 MW and boost both Sri Lanka’s energy supply and bilateral ties.
The leaders will sign MoUs in energy, digitisation, health, and grant assistance. PM Modi will visit Anuradhapura with Dissanayake to pay respects at the Mahabodhi temple and launch India-backed projects, possibly including a railway.
The Indian PM is also expected to raise the fishermen issue, with Tamil Nadu CM Stalin urging a new agreement to protect Indian fishermen near Katchatheevu.
Revival of renewable energy projects
Adani’s port project in Sri Lanka may be inaugurated during PM Modi’s visit, potentially influencing the stalled Adani Green Energy projects in the north. Though withdrawn earlier over tariff disputes, the $1 billion renewable project remains under discussion.
The Dissanayake government had sought lower tariffs amid corruption concerns, prompting Adani’s exit. However, talks have reportedly resumed, with a revised rate of 7 cents per kWh being considered.
The Indian government reportedly views the Adani Green Energy project as a strategic investment and is pushing for its revival. The $1 billion project includes 484 MW wind farms at Mannar and Pooneryn, along with transmission network expansion. It stalled due to tariff disputes and a review by President Anura Kumara Dissanayake’s government.
Adani, having already invested $5 million in pre-development work, withdrew after negotiations broke down but retained most regulatory approvals, except for environmental clearance in Mannar. The company left the door open for future collaboration, and if current talks succeed, work could begin as early as June 2025.
Defence cooperation and economic recovery
India and Sri Lanka are also set to deepen defence ties, with an MoU expected soon. Foreign Secretary Vikram Misri noted this marks a major shift in bilateral relations, moving past the legacy of the Indian Peace Keeping Force’s exit over three decades ago. The pact reflects growing strategic cooperation amid China’s expanding presence in the Indian Ocean.
On the economic front, bilateral trade reached $5.5 billion in 2023–24, with Indian investments totaling $2.2 billion. India has been instrumental in Sri Lanka’s recovery from the 2022 crisis, providing nearly $4 billion in assistance and working closely with the IMF on debt restructuring. It also extended $20.66 million in grants to settle payments on seven line-of-credit projects and converted more repayments into grants. India will additionally fund the $61.5 million Kankesanthurai Port rehabilitation as a grant, reinforcing its long-term commitment to Sri Lanka’s development.
President Dissanayake’s decision to make India his first overseas visit after taking office in 2024 signaled a clear intent to align Colombo’s approach with New Delhi’s strategic priorities in the Indian Ocean Region. In a reciprocal gesture, Modi’s visit—making him the first foreign leader hosted by Dissanayake—highlights the importance both leaders place on strengthening bilateral ties.
