At the same time, it conveyed at the highest level its deep concern at the plight of the mostly Tamil civilian population, emphasizing that their rights and welfare should not get enmeshed in hostilities against the LTTE. The conclusion of the armed conflict saw the emergence of a major humanitarian challenge, with nearly 300,000 Tamil civilians housed in camps for Internally Displaced Persons (IDPs).

In June 2009, Prime Minister announced IRs.500 crores as a grant for relief and rehabilitation in Sri Lanka. So far, India has provided a total of 250,000 family relief packs for the IDPs. It also established an emergency medical unit in the IDP camps, which treated over 50,000 IDPs from March to September 2009. Medicines worth SLR 225 million were also supplied to Sri Lankan authorities. India has also consistently advocated the need for IDPs to be resettled to their original habitations as early as possible.

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In order to help with this, India has provided shelter assistance by way of supplying more than 5,200 tonnes of GI sheets for constructing temporary housing for IDPs. In addition, 20,000 starter packs of agricultural implements have been supplied to help resettling families begin livelihood generating activities. Since the requirement of de-mining is a major constraint on the speed of resettlement, the Government of India has fully financed seven Indian de-mining teams, which are now engaged in various sectors in northern Sri Lanka to help expedite resettlement. The Government of India will continue to remain engaged with the task of helping resettle all IDPs. The need for a national reconciliation through a political settlement of ethnic issues has been reiterated by India at the highest levels. India’s consistent position is in favour of a negotiated political settlement, which is acceptable to all communities within the framework of a united Sri Lanka and which is consistent with democracy, pluralism and respect for human rights. The Government of Sri Lanka has conveyed its assurance that political proposals building on the 13th Amendment to the Constitution will be discussed with the Tamil leadership of the country. Sri Lanka is one of the major recipients of development credit given by the Government of India.

A line of credit of USD 167.4 million for repair and up gradation of the tsunami-damaged Colombo-Matara rail link is already fully operational. Another line of credit of USD 425 million for track laying and supply of rolling stock for the northern railway line has also been offered by the Government of India and various contracts related to this are under preparation. Other important infrastructure-related projects that are currently being discussed between the two governments include the 500MW coal-based power plant in Trincomalee and inter-connectivity of the Indian and Sri Lankan electricity grids. India also continues to assist a larger number of development projects through its grant funding. These include setting up e-learning centres (Nenasalas), provision of fishing equipment to cooperatives, supply of buses for assisting transportation in hilly and remote locations and a variety of small development projects in areas like education, health and training in many parts of the country.

Trade between India and Sri Lanka has grown rapidly after the entry into force of the India-Sri Lanka Free Trade Agreement in March 2000. Bilateral trade touched USD 2.02 billion in 2009 with Indian exports accounting for USD 1.7 billion and Sri Lankan exports accounting for USD 326 million. Sri Lanka is India’s largest trade partner in SAARC. India in turn is Sri Lanka’s largest trade partner globally. In July 2008, the two countries completed negotiations on a Comprehensive Economic Partnership Agreement and steps to finalize the Agreement are expected to be taken in the near future. With FDI approvals of nearly USD 500 million, India is the fourth largest investor in Sri Lanka.

IOC, Tatas, Bharati Airtel, Ashok Leyland, L&T and Taj Hotels are amongst the prominent Indian names present in Sri Lanka. Cultural cooperation is a very important aspect of the bilateral relationship. The Indian Cultural Centre in Colombo actively promotes awareness of Indian culture by offering classes in Indian music, dance, Hindi and yoga. Every year, cultural troupes from both countries exchange visits. India is also committed to the restoration of important icons of the cultural heritage of Sri Lanka. Accordingly, it is participating in the setting up of an International Buddhist Museum in Kandy and the restoration of the Thirukeeteswaram Temple in Mannar. Given the proximity of the territorial waters of both countries, especially in the Palk Straits and the Gulf of Mannar, incidents of straying of fishermen and poaching are common.

Both countries have agreed on certain practical arrangements to deal with the issue of bonafide fishermen of either side crossing the IMBL. Through these arrangements, it has been possible to deal with the issue of detention of fishermen in a humanitarian manner. Today, the India-Sri Lanka relationship is strong and poised for a quantum jump by building on the rich legacy of historical linkages and strong economic and development partnerships that have been forged in recent years.