India has emerged as the foremost partner for Sri Lanka in the endeavor to revitalize its economy, reform its bureaucracy, and enhance decision-making processes for future economic collaborations.

India is the only neighbour of Sri Lanka, separated by the Palk Strait; both states occupy a strategic position in South Asia and have sought to build a common security umbrella in the Indian Ocean.

The two countries are also close on economic terms with India being the island's largest trading partner[2] and an agreement to establish a proto single market also under discussion at an advanced stage.

[3] India was the initial nation to submit its formal endorsement for the financial assistance and debt restructure proposal of Sri Lanka to the International Monetary Fund (IMF).

In a bid to foster and safeguard the Buddhist connections between India and Sri Lanka, Prime Minister Narendra Modi unveiled a grant assistance of USD 15 million during the Virtual Bilateral Summit in September 2020.

[7] In the same year, the two countries have reached an agreement to strengthen their economic and energy ties, signaling a new phase of cooperation and mutual benefits.

[8] Sri Lanka was established as an independent state after colonialism, prior to which the island was governed by a single indigenous kingdom or multiple indigenous kingdoms, with the exception of a 70 year period in which the South Indian Chola Empire extended its rule to Sri Lanka.

Sri Lanka has the longest continuous history of Buddhism of any Buddhist nation, with the Sangha having existed in a largely unbroken lineage since its introduction in the 4th century.

[9][10] In 1987, faced with growing anger amongst its own Tamils, and a flood of refugees,[11][12] India intervened directly in the conflict for the first time after the Sri Lankan government attempted to regain control of the northern Jaffna region by means of an economic blockade and military assaults, India supplied food and medicine by air and sea.

Further India was to send a peacekeeping force, named the IPKF to Sri Lanka to enforce the disarmament and to watch over the regional council.

[16] Even though the accord was signed between the governments of Sri Lanka and India, with the Tamil Tigers and other Tamil militant groups not having a role in the signing of the accord,[17] most Tamil militant groups accepted this agreement,[18] the LTTE rejected the accord because they opposed the candidate, who belonged to another militant group named Eelam Peoples Revolutionary Liberation Front (EPRLF), for chief administrative officer of the merged Northern and Eastern provinces.

Notably, IPKF was alleged to have perpetrated the Jaffna teaching hospital massacre which was the killing of over 70 civilians including patients, doctors and nurses.

[21] The ruthlessness of this campaign, and the Indian army's subsequent anti-LTTE operations made it extremely unpopular amongst many Tamils in Sri Lanka.

India also signed a 400 million USD agreement to help present Sri Lanka's Foreign exchange reserves.

[29] In July 2023, Sri Lankan President Ranil Wickremesinghe met with Prime Minister Narendra Modi in India where they outlined vision for an economic partnership to strengthen the maritime, air, energy, and interpersonal networks between them as well as to accelerate mutual cooperation in the tourism, power, trade, higher education, and skill development sectors.

[31] In September 2023, Sri Lanka's foreign minister, Ali Sabry, backed India in its diplomatic feud with Canada, accusing Canada of being a "safe haven for terrorists" and suggesting Prime Minister Justin Trudeau was prone to making "outrageous and substantiated [sic] allegations".

Negotiations are also underway to expand the free trade agreement to forge stronger commercial relations and increase corporate investment and ventures in various industries.

The Sri Lankan government wants India to ban use of mechanized trawlers in the Palk Strait region, and negotiations on this subject are undergoing.

[citation needed] India officially protested against the Sri Lankan Navy for its alleged involvement in attacks on Indian fishermen on January 12, 2011.

The apathetic attitude of the Indian government and the national media towards the alleged killing of Tamil Nadu fishermen by the Sri Lankan Navy has been strongly condemned.

[46][47] In November 2014, Sri Lanka ordered capital punishment to Indian fishermen who were allegedly involved in drug supply or other kind of smuggling.

Activists from India approached to Sri Lankan government through an appeal, where they stated the need to strengthen south Asian regional cooperation for all such issues.

Indian governments have also showed interest in collaborating with their Sri Lankan counterparts on building tourism between the two countries based on shared religious heritage.

[50] Madhya Pradesh CM Shivraj Chauhan in June 2013 stated he was working with Sri Lankan authorities to build a temple dedicated to the Hindu deity Sita in Nuwara Eliya.

[55] The Sri Lankan minister of Tourism Development John Amaratunga indicates that a ferry service will help tourists from both sides to travel at a very low cost.

[56] India intends to promote increased investments within the economy of Sri Lanka, with a particular focus on pivotal sectors such as energy, tourism, and infrastructure.

[60] In 2015, the Sri Lankan Government expelled an Indian RAW intelligence agent for the role played in uniting the opposition for the 2015 presidential election.

He made this comment in the cabinet meeting, after CID of Sri Lanka Police arrested an Indian national in September for the alleged attempted assassination of Sirisena and former Defence Secretary Gotabaya Rajapaksa.