The intensification of the Sri Lankan government’s war against the separatist Liberation Tigers of Tamil Eelam (LTTE) is provoking growing concerns in New Delhi over the impact on India’s strategic interests. The conflict is not only affecting New Delhi’s relations with Colombo and risks triggering unrest in India, but is also threatening to undermine India’s broader ambitions to establish itself as the preeminent regional power.

A statement by Indian National Security Advisor M.K. Narayanan on May 31 sent a blunt warning to Colombo not to cut across New Delhi’s objectives. Speaking in the wake of Colombo’s recent arms purchases from India’s key regional rivals China and Pakistan, he told reporters: “It is high time that Sri Lanka understood that India is the big power in the region and ought to refrain from going to Pakistan or China for weapons, as we are prepared to accommodate them within the framework of our foreign policy”.

At the same time, Narayanan reiterated India’s previous opposition to supplying Sri Lanka with offensive military equipment. Significantly, he made the remarks after meeting in the southern state of Tamil Nadu where there is growing anger over the Sri Lankan military’s repressive measures and human rights abuses against the island’s Tamil minority. Narayanan also warned the Sri Lankan navy against firing on Indian fishermen in waters between the two countries.

Narayanan’s comments provoked sharp responses in Islamabad and Colombo. A spokesperson for Pakistan’s Foreign Office declared that “Pakistan would not accept hegemonic tendencies from any country in the region,” adding that “the matter is primarily for Sri Lanka to decide”. Although the Sri Lankan government reaffirmed its close relations with India, editorials in major newspapers warned against India becoming “a bully”. The Sinhala extremist Janatha Vimukthi Peramuna (JVP), which is demanding the government intensify the war against the LTTE, declared that “India should not return to bad neighbour policy”.

Since coming to power in November 2005, President Mahinda Rajapakse has effectively ditched the so-called peace process backed by the major powers. In open breach of the 2002 ceasefire, the military has seized LTTE territory in the east of the island and has proclaimed its determination to overrun the LTTE’s northern strongholds as well. The military offensives have involved indiscriminate aerial and artillery bombardment that has killed hundreds of civilians and rendered hundreds of thousands homeless. At the same time, the security forces are implicated in the murder or “disappearance” of hundreds of people, mainly Tamils.

The escalating war in Sri Lanka has placed India in a bind. New Delhi has opposed the LTTE’s ambition to create a separate capitalist statelet in northeastern Sri Lanka, fearing that it would encourage separatist movements in India itself, including in Tamil Nadu. India banned the LTTE as “a terrorist organisation” after the assassination of Prime Minister Rajiv Gandhi in a suicide bombing in 1991.

At the same time, the Indian government cannot afford to alienate political allies in Tamil Nadu by openly supporting Colombo’s communal war. Political opposition in Tamil Nadu to a defence cooperation agreement between the two countries has kept the deal on the drawing board since 2003. For the same political reasons, India has been unwilling to sell offensive military equipment to Sri Lanka.

At the same time, the Indian political establishment is deeply concerned at Chinese and Pakistani efforts to establish a foothold in Sri Lanka. Pakistan has become a major military supplier, selling multi-barrel rocket launchers, tanks, artillery and guns to Colombo. Sri Lanka has purchased ammunition and small arms from China and placed orders last month for sophisticated radar units. Colombo is also developing significant political, trade and economic ties with Beijing. China has started construction on a $US360 million deep-water port in Hambantota in southern Sri Lanka, which could facilitate a Chinese naval presence in the Indian Ocean.

India has close economic ties with Sri Lanka, which have become increasingly important after the signing of a Free Trade Agreement (FTA) in 2000. India is now Sri Lanka’s largest trade partner with annual trade at $US1.2 billion and the fourth largest foreign investor in Sri Lanka. New Delhi and Colombo are currently working to upgrade the FTA into a Comprehensive Economic Partnership Agreement (CEPA) to include trade in services and encourage investment. As far as India is concerned, Sri Lanka is a model for developing its broader regional economic clout through a South Asian Free Trade Agreement.

To date, India has largely stood aside from the war in Sri Lanka, hoping the international peace process would resolve the conflict. As the fighting resumed, New Delhi no doubt expected the major powers, particularly the US, to force the Rajapakse government and the LTTE back to the negotiating table. However, the Bush administration, while still issuing perfunctory appeals for peace talks, has tacitly backed the renewed war.

Washington’s growing presence in Sri Lanka is another concern in New Delhi. Since 2000, successive Indian governments have pursued close military, economic and political relations with the US. In the wake of September 11, both countries seized on the “war on terror” to promote a closer “strategic partnership”. However, while it regards the US alliance as an important tool to elevate its standing as a regional power, New Delhi sees Washington’s activity in Sri Lanka as interference in its backyard.

A more interventionist approach

Narayanan’s warning to Sri Lanka not to compromise India’s strategic interests reflects all these concerns and may be a prelude to New Delhi’s more direct involvement. Just a week earlier, an influential Indian think tank—the Institute for Defence Studies and Analyses (IDSA)—issued a policy brief recommending that New Delhi adopt a more proactive approach. While asserting that China and Pakistan had not “reduced India’s influence or space in Sri Lanka in any major way,” the IDSA nevertheless commented:

“The allocation of an exploration block in the Mannar Basin to China for exploration of petroleum resources, just a few kilometres from India’s southern tip, and reports of Pakistan’s effort and interest in bringing around the Muslim population in Sri Lanka under its influence may have raised concerns in certain quarters but the Government of India has refrained from taking any concrete steps to resolve the escalating ethnic conflict in Sri Lanka.”

The IDSA paper also noted that concerns about the rising tide of Sri Lankan refugees was “beginning to impact on the political space in Tamil Nadu,” adding: “In fact, if the situation in Sri Lanka deteriorates further, it may affect the provincial politics, compelling the central government to revise its policy of watchful-inaction in future.”

The IDSA set out a list of options for India which focussed on pressing the Sri Lankan government to address the rights of the Tamil minority, end the “humanitarian costs of its war efforts” and revive the peace process. It hinted that any support for the Colombo’s war against the LTTE would have to be weighed against “the willingness of the GOSL [Government of Sri Lanka] to concede a devolution of power to the moderate Tamil elements”.

The IDSA’s rather cautious recommendations are conditioned by past experiences. In the early 1980s, New Delhi cynically provided support and arms to the LTTE and other Tamil separatist groups to placate anger in Tamil Nadu over the anti-Tamil abuses in Sri Lanka and to pressure the Sri Lankan government to pull back from close relations with the US. However, as the civil war escalated, India signed the Indo-Lanka Accord in 1987 and sent “peacekeeping” troops to the North of the island. The military intervention turned into a disaster after fighting broke out with the LTTE in which there were thousands of Indian casualties. The “peacekeepers” were finally forced into a humiliating withdrawal in 1990.

Subsequent Indian governments have been reluctant to intervene directly, but the intensifying war in Sri Lanka is putting pressure on New Delhi to do so. Narayanan’s comments indicate that a debate has opened up in Indian political and military circles over the government’s policy toward Sri Lanka. An article in the Times of India on June 6 indicated that the current “do nothing” strategy is increasingly coming under attack. At a top-level strategy meeting on June 5 chaired by Defence Minister A.K. Antony and attended by Narayanan, the armed forces chiefs pushed for more military aid for Sri Lanka.

The Times of India reported there was deep concern in military circles that China would fill the political and strategic vacuum in Sri Lanka if India did not intervene. The defence establishment reportedly cited the case of Myanmar (Burma) where China forged a close relationship in the 1990s as India distanced itself from the country’s military junta. “We might be forced to make a strategic U-turn [on Sri Lanka], as we did in the case of Myanmar,” a senior military officer told the newspaper.

In an article in the Outlook India magazine on June 12 entitled “Reluctant Hegemon,” Indian analyst Ajai Sahni explained: “India’s quandary arises principally out of its apprehensions of the political fallout in Tamil Nadu of any unqualified assistance to Colombo in its war against the LTTE... It remains the case, however, that the pressures of local sentiments and sympathies have to be balanced against India’s strategic projections and calculations, as well as India’s robust relationship with Colombo.”

After calling for New Delhi to pressure Colombo to end its “patently discriminatory actions” against Tamils, Sahni wrote: “A far greater measure of realism must attend the Indian position on military assistance. If Colombo is to resist the temptation of Chinese and Pakistani aid, it must have absolute confidence in Delhi’s intentions and capabilities to meet its requirements. Quibbles over ‘defensive’ and ‘offensive’ weaponry have little place in the realpolitik that will define South Asia’s future, and India’s position within it.”

At present there are no obvious signs that the Indian government has revised its “do nothing” policy. But as the Sri Lanka war escalates and reverberates throughout the region, the pressure on India to intervene to defend its vital interests will grow, making the island a potential flashpoint for broader rivalry and conflict.