WEEKLY CURRENT AFFAIRS

1 WEEKLY CURRENT AFFAIRSW ebinar HandoutWEEKLY CURRENT AFFAIRSW ebinar HandoutCONTENT DECEMBER - 2021 (2nd WEEK) India Srilanka _____ 02-05 Free trade Agreements (FTAs) _____ 06-08 World Inequality Report 2022 _____ 09-10 AFSPA: Is it Relevant? _____ 11-12 Pendency of Constitutional Cases in Supreme Court _____ 13-14 1. India Srilanka Quote: India is a relative, China a friend - Mahinda Rajapaksa (Prime Minister of Sri Lanka) Context: Following the recent Indian visit of SriLankan Finance Minister, the Srilankan high commission released a statement outlining the four point package deal finalised between both countries.

2 The statement specifically mentioned the early modernisation of Trincomalee tank farm. Details: As per the Srilanka High Commission s statement, the cooperation cum assistance package deal includes following pillars: o Food and health security package: Under this package, India will extend a line of credit (LOC) to cover the import of food, medicines and other essential items. o Energy security package: It includes- LOC to cover the import of fuel from India. Early modernisation of Trincomalee Tank Farm. o Currency swap offer: It will help Sri Lanka address its balance of payment issues o Investments: Indian investments in different sectors will be facilitated to contribute to Sri Lanka s growth and expansion of employment.

3 It was also agreed to open direct lines of communication and to be in direct and regular contact with each other to coordinate on this initiative. About Trincomalee Oil Tank Farm and Harbour: Situated on the north east coast of Srilanka, Trincomalee oil tank farm was initially built during WW2 by the British. The Trincomalee Harbour is one of the deepest natural harbours in the world. Figure: Ports in Sri Lanka Source: Mains Paper General Studies 2 Syllabus: Bilateral, regional and global groupings and agreements involving India and/or affecting India s interests Trincomalee Joint Modernisation Project: In 2015, India and Sri Lanka had agreed to revive the World War II era oil tank farm.

4 At present Indian Oil Corporation subsidiary Lanka IOC runs 15 out of the 99 storage tanks in the lower oil tank farm in Trincomalee. The proposed modernisation joint venture is about modernising the 84 remaining tanks in the upper farm. Significance of Trincomalee Oil Tank Farm project to India: Strategic Significance: From India s geostrategic viewpoint, Trincomalee is an important counterbalance to the southern Hambantota Port backed by China. Development: India also views the project as a means to participate in Sri Lanka s development. Soft Power: Successful completion of this project will strengthen India s image as a responsible pro development regional power.

5 Challenges in Project: Internal politics: Dominant nationalist narrative in the domestic Politics of Sri-lanka is against handing national assets to foreign powers specially to India. Workers Protest: Workers Unions in Sri Lanka are protesting against the handing over of a strategic national asset to a foreign country. Chinese Shadow: Chinese Influence on foreign policy of Sri Lanka due Debt Trap and Deep Pocket diplomacy. It creates hurdles for fruitful engagement between India and Sri-lanka. How does it help Sri Lanka? The modernisation of Trincomalee will help the coastal town become a regional petroleum hub.

6 It will help strengthen the energy security of Sri-lanka. Indo-Lanka Relations: The Indo-Srilanka relations date back thousands of years. There is a cultural and civilizational connection between both nations. CURRENT Relations: o Neighbourhood first policy: CURRENT Indian foregn policy towards Sri Lanka is guided by neighbourhood first policy. India recently bailed out Sri Lanka with fertilisers for the island s farmers after Chinese-made fertilisers had to be rejected on grounds of quality. o Set Back: In feb 2021, Sri Lanka scrapped a 2019 trilateral deal with India and Japan to operate the East Container Terminal at the Colombo port.

7 O Conciliation: In October 2021, state-owned Sri Lanka Ports Authority (SLPA) inked a deal with India s Adani Group to develop and run the West Container Terminal at Colombo port. o Deepening of Ties during crisis: In october 2021, India handed over 1200 houses and two colleges to Sri-lanka. In December 2021, Srilankan Finance minister chose India as his first foreign visit destination. It signals towards growing warmth in relations between both countries. The 4 pillar cooperation to help Sri Lanka will further deepen the relations. Financial relations: o trade : India has traditionally been among Sri Lanka s largest trade partners Sri Lanka remains among the largest trade partners of India in the SAARC.

8 In 2020, India was Sri Lanka s 2nd largest trading partner with the bilateral merchandise trade amounting to about $ billion. FDI: India is also one of the largest contributors to Foreign Direct Investment in Sri Lanka. o During the period 2005 to 2019, FDI from India amounted to about US$ billion. Development Cooperation: India is engaged in various developmental projects in SriLanka under its development cooperation initiative as shown below: Figure: Indian assistance to Srilanka under Development cooperation Source: Indian High commission in Srilanka Way Forward: India must be careful that it is not dragged into the economic assistance competition with China in the island nation.

9 India can't compete with China's deep pockets. India must focus on High Value, visible and people-friendly developmental projects to strengthen India s presence in the hearts and mind of the people of Srilanka. Conclusion: Sri-Lanka is an important pillar of India s vision of being a net security provider in the Indian Ocean. Developmental efforts like Trincomalee modernisation project and 4 pillar cooperation agreement will help both countries to co-develop and strengthen the age-old ties. Which of the following statements is/are correct? 1. Trincomalee is one the deepest artificial harbours in the world.

10 2. During the period 2005 to 2019, Foreign Direct Investments from India to Sri Lanka amounted to about US$ 50 billion. Choose the correct answer using the codes given below: (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Answer: (d) Explanation: Statement 1 is incorrect: It is one of the deepest natural harbours of the world. Statement 2 is incorrect: During the period 2005 to 2019, FDI from India to Sri Lanka amounted to about US$ billion only. India-Srilanka's recent cooperation deal is significant to both nations. Discuss. (10 Marks, 150 Words) 2.