Between Two Giants | How Sri Lanka Can Benefit From India–China Rivalry


Sri Lanka’s strategic location in the Indian Ocean places it in a unique position amidst two of Asia’s most powerful and competitive nations, India and China. While the growing geopolitical rivalry between these regional giants can pose challenges for smaller nations, it also presents Sri Lanka with opportunities if handled wisely. Rather than choosing sides, Sri Lanka can benefit by adopting a pragmatic and balanced foreign policy, rooted in non-alignment and national interest.

Strategic Non-Alignment and A Foundation for Flexibility

Sri Lanka has a long-standing tradition of non-aligned diplomacy, and this remains a powerful asset in a world increasingly shaped by regional blocs and power competition. By staying neutral and avoiding direct alignment with either India or China, Sri Lanka can retain the freedom to engage with both on its own terms. This neutrality can also position Sri Lanka as a credible host for dialogue, conflict de-escalation, or multilateral cooperation between these two powers. Hosting regional conferences, maritime security forums, or economic dialogues could raise Sri Lanka’s profile and influence in South Asia.

A Historic Legacy of Mediation - Sirimavo’s Colombo Proposals

Sri Lanka’s commitment to neutrality and peacebuilding has historic precedent. During the 1962 Sino-Indian War, Prime Minister Sirimavo Bandaranaike took a bold diplomatic step by proposing the Colombo Proposals in 1963. She brought together six non-aligned nations including Ceylon (Sri Lanka), Ghana, Indonesia, Cambodia, Burma (Myanmar) and the United Arab Republic to advocate for a peaceful resolution. The proposals were a set of recommendations including mutual troop withdrawals and resumption of dialogue to resolve the Sino-Indian border conflict. Though the plan wasn’t fully adopted, her effort demonstrated that even a small country could play a constructive mediating role in international conflicts. Her legacy reinforces that Sri Lanka can remain neutral while actively promoting regional stability.

Dual Investment Channels - Maximizing Economic Benefits

China has made significant infrastructure investments in Sri Lanka, including the Colombo Port City and Hambantota Port, while India continues to be one of Sri Lanka’s top trade partners and investors, particularly in energy, railways, tourism, and education. Rather than favouring one over the other, Sri Lanka can use this dynamic to negotiate better terms, ensure transparency, and attract competitive financing. Encouraging third-party partnerships involving countries like Japan or the UAE can also help avoid dependency and increase leverage. A balanced investment approach would strengthen Sri Lanka’s economy while preserving its strategic autonomy.

Connectivity as a Regional Hub

Sri Lanka’s location makes it a natural connectivity hub between South and Southeast Asia. Both India and China are pushing connectivity initiatives as India through BIMSTEC and SAGAR and China through the Belt and Road Initiative (BRI). Sri Lanka can position itself as a transshipment hub and a key player in regional maritime trade. By upgrading its ports, airports and digital infrastructure with support from both countries, Sri Lanka can become the “Switzerland of South Asia” neutral, connected and indispensable to regional logistics.

Leverage for Human Capital and Technology Transfer

Beyond infrastructure, India and China are both expanding their soft power through scholarships, cultural exchange programs, and training opportunities. Sri Lanka should maximise this by encouraging student exchange, academic partnerships, and technology cooperation in health, IT and renewable energy. The country can also aspire to become a regional educational hub, offering affordable, English-medium higher education for students from neighbouring nations. Investing in human capital now will yield long-term benefits that extend far beyond short-term funding or aid.

Balance - Not Blind Engagement

Despite the potential benefits, Sri Lanka must exercise caution. Overreliance on one country can lead to debt dependency, political pressure or loss of strategic assets as seen in past controversies. To avoid such outcomes, Sri Lanka should prioritize transparency in deals, environmental and social safeguards, and institutional oversight. Agreements must be based on sovereignty-first principles and aligned with long-term national interests. The government must also engage with civil society and local communities to ensure that foreign-backed projects deliver real and equitable benefits.

Final Thoughts

Sri Lanka is not merely a passive observer in the India–China rivalry. With wise leadership and a non-aligned, nationally focused strategy, it can be an active player that turns tension into opportunity. The country can attract investments, serve as a regional connector and promote peace. In today’s competitive world, the smartest choice is not to choose sides but to stand firm on a path that prioritizes sovereignty, sustainability and strategic balance.

By Chandima Wanniarachchi | Global Dispatch

Comments

  1. KumariJuly 16, 2025 at 4:09 AM

    Very insightful - Kumari

    ReplyDelete
  2. Kalana GamageJuly 23, 2025 at 2:20 AM

    A timely and thoughtful article for Sri Lanka’s future

    ReplyDelete
  3. ChathuriJuly 25, 2025 at 2:50 AM

    A real eye opener! Well done Chandima

    ReplyDelete
  4. ShandhiyakumaryJuly 27, 2025 at 1:33 AM

    Your balanced perspective shows how Sri Lanka can skillfully navigate great power rivalries for national gain.

    ReplyDelete
    Replies
    1. Chandima WanniarachchiJuly 28, 2025 at 3:18 AM

      Thank you, Shandhiya! Navigating great power dynamics wisely is key and I’m glad the article sparked that reflection

      Delete
  5. Nithiyakala.P., Gvt.TranslatorAugust 10, 2025 at 2:45 AM

    The present rulers manage to be successfully benefitted from these two giants by their strategic approaches.

    ReplyDelete

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