India’s ‘Neighborhood First’ policy towards Sri Lanka had resonated with Sri Lanka’s ‘India First’ foreign and security policy in 2020.
- India is Sri Lanka’s third-largest export destination, after the US and UK. More than 60% of Sri Lanka’s exports enjoy the benefits of the India-Sri Lanka Free Trade Agreement, which came into effect in March 2000.
- India is also a major investor in Sri Lanka. Foreign direct investment (FDI) from India amounted to around $1.7 billion over the years from 2005 to 2019.
- Concessional financing of about $2 billion has been provided to Sri Lanka through various Indian government-supported Lines of Credit across sectors.