Sri Lanka is a geo-politically important country for India and New Delhi needs to counter the growing Chinese influence on its economy as it struggles to avoid sovereign defaults.
However, in terms of trade, it holds minor importance for India. For instance, India’s exports to Lanka are now nowhere near $6.7 billion in 2014-15.
The share in India’s total exports declined from 2.16 per cent in FY15 to just 1.3 per cent in the first 10 months of the current financial year.
India’s imports from Lanka remained less than $1billion in all these years and the share remained in the range of 0.16-0.19 per cent. Only in 2018-19, the share rose to 0.29 per cent.
However, when viewed from Lanka’s perspective, India’s exports at $4.79 billion accounted for 23.25 per cent of its imports in 2021. India’s imports at $979 million, however, constituted just 7.8 per cent of Sri Lanka’s total exports of $12.5 billion in 2021.