India and Sri Lanka share common historical ties, more so because of geographical proximity. They have always enjoyed close political and economic relations. However, this close relationship has recently been strained a little, as Sri Lanka’s growing friendship with China has not set well with New Delhi, who feels its influence in the region is waning as China encroaches on all sides with major development projects in Bangladesh, Myanmar, Maldives, Nepal and Pakistan, particularly in Sri Lanka.
A pact on economic cooperation was signed between Sri Lankan Prime Minister Ranil Wikremesinghe and his host Prime Minister Narendra Modi on April 26, 2017. The pact outlines the agenda of economic cooperation in foreseeable future and both nations vowed to ensure successful implementation of the agenda. This move by India was aimed at warding off increasing Chinese influence in the South Asian region.