Will a new president shift Sri Lanka's approach to India and China?

Anura Kumara Dissanayake was sworn in as Sri Lanka's new president this week, providing a fresh start for the beleaguered island nation as it emerges from the  worst economic crisis in its independent history.

Dissanayake, popularly known as AKD, leads the Marxist-leaning National People's Power alliance, which includes his party, the Janatha Vimukthi Peramuna (JVP) or People's Liberation Front.

During his election campaign, the 55-year-old promised to restore economic order, address poverty and review the terms of Sri Lanka's $2.9 billion (€2.6 billion) International Monetary Fund bailout.

As Dissanayake embarks on the monumental task of economic stabilization, the big question is how the election's outcome will shape Sri Lanka's foreign policy in a region where political stability is fragile and both India and China are vying for influence.

Strategic stakes for India and China

Experts and academics who spoke to DW believe the new government will follow a more nuanced approach in its foreign policy calculations and dealings with the Asian rivals.

Sri Lanka's 2022 economic crisis opened an opportunity for India to regain some influence that it had lost to China, which became a significant player in Sri Lanka. 

New Delhi stepped in with about $4 billion (€3.6 billion) in financial assistance, including food, essential medicine and fuel, as well as currency swaps and loan deferments.

For its part, Beijing provided around 500 million yuan ($75 million, €73 million) in humanitarian aid, such as food, pharmaceuticals and other essentials.

"AKD is aware that China's debt is significant and India's economic bailout and geographical proximity are indispensable," Srikanth Kondapalli, a professor of China studies at New Delhi's Jawaharlal Nehru University, told DW, referring to Sri Lanka's strategic location at the crossroads of busy shipping routes linking Asia to Africa and Europe.

"He is likely to follow a balanced policy with primacy to economic development," he added.

Professor Sreeradha Datta, a Sri Lanka expert from the India-based Jindal School of International Affairs, said that despite its past anti-India stance and ties with China, the JVP is expected to adopt a more moderate approach under Dissanayake's leadership.

"No president in Sri Lanka can afford to or would espouse such strong positions," Datta said. "For a head of the government, pragmatism is bound to offer greater opportunities and while many in India enjoy overplaying the China preferences, I do not think we need to focus on that too much."

Datta suggested that "China will continue to engage, but India will also be seen as a partner."

Earlier this year, Dissanayake visited India and met with External Affairs Minister S Jaishankar and National Security Advisor A K Doval.

Following his election victory, Dissanayake was quick to respond to Indian Prime Minister Narendra Modi's congratulatory message, promising to work together.

Chinese President Xi Jinping also congratulated him and pledged to work with the new government on boosting development and cooperation in China's Belt and Road Initiative (BRI) — often dubbed the New Silk Road — a massive infrastructure plan that aims to smooth trade links with dozens of countries.

In Datta's reckoning, India will need to convey its political and economic intention to engage with Sri Lanka and continue to extend support and cooperation.

"Let us not forget that not many governments in Colombo have been particularly close to India, but times are changing and India has much to offer and Dissanayake needs to deliver to its people," she added.

Which way will Sri Lanka tilt?

Though Dissanayake has expressed his intentions to boost ties with both China and India, he made it clear that Sri Lanka's assets — including its land, sea and airspace — are not up for grabs.

This stance was evident when he recently opposed India's Adani Group gaining control over key sectors like Sri Lankan ports and renewable energy, citing environmental concerns.

"India's South Asian neighbors are increasingly adopting an 'India plus China' strategy to balance their economic interests between the two rising Asian powers," Ajay Bisaria, a former Indian diplomat, told DW. "But, so far at least, India is the preferred security partner. On its part, India is learning to build long-term equities in the neighborhood that transcend regimes."

Bisaria pointed out that New Dehli had been engaging with Dissanayake well before he came to power, and the financial support was an example of the advantages India provides to its smaller neighbors.

Additionally, he felt that the strong web of economic interdependence has built tremendous goodwill that will not diminish across governments.

"While newer regimes in India's neighborhood may bring cyclical changes in their emphasis on relations with India — as seen in Bangladesh and the Maldives — the overall trend is toward increased engagement with India," said Bisaria.

In the long run, Datta said the strategic competition in the Indian Ocean is bound to play out sharply, and it was improbable for Sri Lanka to give any assurances to India on that count at this point.

"But given their history with China, Sri Lanka is bound to be wary and would not be rushed to accommodate China as we have seen previous presidents do in the past," she said.

"It would tread slowly and I am sure Dissanayake has a deftness that we may not be aware of yet."