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Friday June 21st, 2024

Arms manufacturers show Indian capability to Sri Lankan military

ECONOMYNEXT – Indian arm manufacturing firms showed the Delhi’s capability in arm manufacturing to Sri Lankan military at a seminar on Wednesday which the island nation expects to open the door for future joint collaboration in manufacturing and services.

Indian High Commission in Colombo High Commission organised the seminar titled “Identifying New Opportunities and Forging New Bonds” to promote Indian Made Defence equipment and explore avenues for collaboration in defence production.

India’s privately owned defence companies demonstrated the capability they have developed in manufacturing arms and other products including unmanned aerial vehicles (UAVs), latest drones, and latest earth movers used in war zones.

The delegation comprised representatives from Indian Defence companies including Hindustan Aeronautics Limited, Bharat Electronics Limited, Zen Technologies, SSS Defence, Bharat Forge, Big Bang Boom Solutions, AWEL, AVNL, Mahindra Defence, Sager Defence and TATA Advances System Ltd.

They presented their manufacturing capabilities and the advantages of using them in a modern war.

From the Sri Lankan side, Chief of Defence Staff, Commander of Sri Lanka Navy, Commander of Sri Lanka Air Force and other senior officers from Sri Lankan Armed Forces, Police and Special Task Force attended the event along with representatives of leading Sri Lankan business conglomerates.

Santosh Jha, the Indian High Commissioner to Sri Lanka underlined the increasing diversification of India-Sri Lanka bilateral cooperation across domains, including in security and defence matters.

“He emphasised that because of geography, the security of India and Sri Lanka is interlinked and intertwined,” Indian High Commission of Sri Lanka said in a statement.

“India’s defence exports today stand at nearly 2.6 billion US Dollars, a ten-fold increase over the past five years. High Commissioner stated that the seminar was another platform to explore ways of extending India’s increasing capabilities in the defence sector to Sri Lanka.”

TOUGH PAST 

Sri Lanka military had been in desperate situations for modern arms when they were fighting a civil war against Tamil Tiger rebels popularly known as Liberation Tigers of Tamil Eelam (LTTE) who demanded an independent state in the island nation’s resourceful North and East.

The military, however, ended the 26-year war in 2009 annihilating all LTTE leaders including its supreme leader Velupillai Prabhakaran.

India, which strongly backed LTTE by providing arms and training in the early stage of the war, took a complete U-turn and helped Sri Lanka military in the final stage of the war.

The LTTE killed Indian Prime Minister Rajiv Gandhi in 1991 after his government sent Indian Peace Keeping Force (IPKF) to stop the violence in the North as per a deal signed between the two neighbours.

India, along with China, Pakistan, and the United States helped Sri Lanka to end the war amid strong concerns over war crimes and human rights violation by the Sri Lankan armed forces.

Since the end of the war, India has been increasingly involved with Sri Lanka armed forces, providing trainings and conducting joint military exercises with a special focus on maritime security after China increased its footprint in Sri Lanka.

China has owned Sri Lanka’s largest port in the country’s deep southern district of Hambantota where the world’s second largest economy is in the process of building a $4.5 billion refinery and establishing an investment zone.

USING INDIAN WEAPONS 

A similar Defence Seminar and Exhibition has been conducted in June last year, the Indian High Commission said.

“Sri Lanka Armed forces have been successfully operating a range of Indian defence equipment like L-70 guns, Indra Radar, Offshore Patrol Vessels and Army training simulators,” it said.

“More recently the GoI (government of India) has committed supply of Floating Dock, Maritime Rescue Coordination Centre and Dornier aircraft which would ensure capacity building of Sri Lanka Armed Forces.”

Shri Anurag Bajpai, Indian Defence Ministry’s Additional Secretary (Defence Production) reassured that India stands committed towards ensuring capacity and capability building of Sri Lanka Armed Forces as part of Prime Minister Narendra Modi’s vision of SAGAR (Security & And Growth for All in the Region).

“He highlighted the common security challenges faced in the Indian Ocean Region and called for enhanced collaboration to create a safer environment,” the Indian High Commission said in a statement.

“He shared Aatma Nirbhar Bharat’s, self-reliant India’s upward trajectory in establishing robust R&D (research and development) and indigenous manufacturing ecosystems, while fostering innovation and entrepreneurship”.

“NEW AREAS OF ECONOMIC REVIVAL”

Sri Lanka has been looking for collaboration to earn foreign exchange in all sectors including military since an unprecedented economic crisis in 2022 which forced the country to default sovereign debts.

Since then, the island nation has yet to pay its private and bilateral external creditors.

“This could hopefully open the door to future joint collaboration in manufacturing and services as well as joint research and development, thereby identifying new areas for economic revival whilst ensuring capacity building of the Sri Lankan Armed Forces,” State Minister of Defence Premitha Bandara Tennakoon told the participants at the seminar.

“…as we embrace the era of fourth industrial revolution technologies, we must adapt to the changing landscape of warfare,” he said.

“Innovations in artificial intelligence, cyber security, unmanned systems, and space technologies have revolutionized the way we perceive defence and security.”

“It is essential for us to remain at the forefront of these developments, continuously modernizing our armed forces to counter emerging threats effectively. I believe this seminar is therefore taking us in this future direction.” (Colombo/April 12/2024)

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Indian FM meets Sri Lanka political leaders; focuses on committed deals

ECONOMYNEXT – Indian External Affairs Minister (EAM) S. Jaishankar met President Ranil Wickremesinghe and a range of political leaders during his visit to Sri Lanka, focusing on commitments made by Sri Lanka to India, including land and energy pipeline connectivity.

Sri Lanka has committed to renewable energy deals for the Indian Adani group, Trincomalee port development, an investment zone around the port, a bridge between the island nation’s Northern Mannar and South India’s Rameshwaram, a power grid, and an oil and gas pipeline between the two nations.

Though most of the committed projects have been discussed and some already signed, they face delays amid public protests, court cases on environmental concerns, anti-Indian sentiments triggered by high prices of renewable projects, local politicians as well as perceived Chinese influence, analysts say.

India has been pushing Sri Lanka to fast-track these deals under Prime Minister Narendra Modi.Jaishankar’s visit also comes ahead of Sri Lanka’s presidential polls later this year.

Jaishankar met President Wickremesinghe in a one-on-one meeting, Prime Minister Dinesh Gunawardena, and Foreign Minister Ali Sabry before delegation-level talks with Ports, Shipping and Aviation Minister Nimal Siripala de Silva, Agriculture and Plantation Industries Minister Mahinda Amaraweera, and Power and Energy Minister Kanchana Wijesekera.

“Appreciated the progress made on various bilateral projects and initiatives. Under President Ranil Wickremesinghe’s guidance, we discussed the way forward for India-Sri Lanka cooperation, especially in power, energy, connectivity, port infrastructure, aviation, digital, health, food security, education, and tourism sectors,” Jaishankar said on his official Twitter platform.

He also met former President Mahinda Rajapaksa, opposition leader Sajith Premadasa, and leaders of various political parties from the North, East, and the upcountry region.

“Interaction of EAM with the leadership of the Government of Sri Lanka provided an opportunity to review and accelerate progress in the multifaceted India-Sri Lanka partnership,” the Indian External Affairs Ministry said in a statement.

One of the key focus areas of discussion was the Vision Document adopted by President Wickremesinghe and Prime Minister Modi during the Sri Lankan leader’s visit to India in July 2023.

“Discussions added momentum to the ongoing projects as well as initiatives for promoting connectivity in all its dimensions, particularly in domains of energy, physical infrastructure as well as economic and people-to-people ties.”

Jaishankar also met leaders of Sri Lanka’s upcountry Tamils, who originally came from India as plantation workers. He discussed development and devolution of power with an eight-member delegation of Tamil leaders from the Northern and Eastern provinces, including Shanakiyan Rasamanikkam and M. A. Sumanthiran.

India helped Sri Lanka with financial and humanitarian aid when the island nation faced an unprecedented economic crisis amid delays by the International Monetary Fund loan to rescue Sri Lanka.

“Following Sri Lanka’s economic recovery and stabilization, forging deeper long-term economic cooperation was underlined as a priority for sustainable and equitable growth of Sri Lanka, and mutual prosperity in the Indian Ocean Region,” the Indian External Affairs Ministry said.

Though the Sri Lankan government has claimed that Jaishankar’s visit was a precursor to Indian Prime Minister’s visit, the Indian External Affairs Ministry did not mention anything about a possible Modi visit.

This visit is Jaishankar’s first bilateral visit after the formation of the new government.

The Adani wind power project in the Northern district of Mannar has seen some public protests over environmental concerns after some experts said the project has failed to conduct a proper Environmental Impact Assessment (EIA). Critics also protest against its transparency.

President Wickremesinghe, opposition leader Premadasa, and Marxist Janatha Vimukthi Peramuna (JVP) leader Anura Kumara Dissanayaka are expected to contest in the election to choose the island nation’s 8th leader.

Sri Lankan leaders have been under pressure from India in the past two decades amid increasing Chinese influence in the island nation, seen as a security threat to India, analysts say.

The docking of a Chinese nuclear submarine in 2014 led to a dramatic government change in the 2015 presidential poll with the ousting of former leader Mahinda Rajapaksa, who later accused India of orchestrating his defeat.

Rajapaksa’s brother Gotabaya in 2021 unilaterally canceled a key port terminal project given to India’s Adani group after promising Jaishankar to sign the deal.

Gotabaya Rajapaksa was later forced to flee the country in 2022 after mass protests due to his economic policies. (Colombo/June 21/2024)

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Sri Lanka car permit tax losses Rs14bn in two years of partial disclosure

ECONOMYNEXT – Sri Lanka has lost 14.3 billion rupees in taxes from car permits given to public servants, including doctors, military officers, central bankers, finance ministry and tax officials, in 2019 and 2020 information disclosed by the finance ministry shows.

Inclusive of some 2021 tax losses when imports were banned for the rest of the year, 14.4 billion rupees of foregone revenue from a waived luxury tax is shown.

The list only shows waivers of a so-called ‘luxury tax’ imposed on larger vehicles above a certain value and size.

The list does not show other vehicles imported under car permits such as double cabs or cars below a certain size.

The list also does not seem to include tax free cars imported by politicians.

In 2019, Sri Lanka has lost 8.3 billion rupees from the luxury tax on car permits and in 2019 the loss 5.92 billion rupees.

In 2021 when car imports were stopped as the central bank started printing money to cut rates and target ‘potential output’ only 85.6 million rupees were lost.

Among the biggest tax waivers of over 10 million rupees went to some doctors and military officers. Doctors were among the biggest users of tax slashed car permits in the list.

Sri Lanka at one time did not allow cars imported by state workers to be transferred for many years.

But reportedly after Customs raided a finance company involving a fleet of vehicles, the rule was relaxed by the then President.

Among the largest tax waivers listed were given to Rolls Royce and Maclaren assigned to Melwire Rolling (Pvt) Ltd.

The 45.6 million rupee Rolls Royce was given a 42.1 million rupee tax waiver.

The 41.46 million McLaren was given a 37.9 million tax waiver.

There were also a large number of Audi A5 and Q2 vehicles listed at prices over 80 million rupee. It is not clear whether the disclosure is an error. The market value of the A5 and Q2 are much lower.

Up to end 2023, 138 cars imported under a migrant worker remittance scheme was listed to lose 436 million rupees in luxury taxes.
The total for the three years was listed at 14.86 billion rupees, involving 2,034 cars in 2019 and 1,470 cars in 2020.

It is not known how much the total tax losses or total vehicle imported through ‘car permits’ is. (Colombo/June20/2024)

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Construction of Sampur solar power plant to begin mid-July

ECONOMYNEXT – Joint energy projects between India and Sri Lanka, including the Sampur solar power plant due to begin next month, took centre stage during bilateral discussions between president Ranil Wickremesinghe and visiting Indian External Affairs Minister S Jaishankar on Thursday.

Wickremesinghe and Jaishankar discussed initiatives aimed at enhancing energy connectivity and developing the renewable energy sector, a statement by his media division said.

“Significant attention was given to plans for an LNG supply, a proposed petroleum pipeline linking the two countries, and advancing oil and gas exploration projects. Additionally, it was announced that construction of the Sampur Solar Power Plant is set to commence in July 2024.”

The visit comes amid delays in key Indian projects including land, oil and gas pipe, and grid connectivity deals, Adani’s wind power plant deals which are facing a legal battle, and port and investment zone projects in the Eastern port district of Trincomalee.

Indian supported projects for developing Trincomalee and expanding the Kankasanthurai port, the ongoing development of Jaffna Airport and Colombo Airport, and the expediting the unique digital identity card project were discussed.

The efficiency of projects supported by the Indian government aimed at bolstering Sri Lanka’s liquid milk industry and fertilizer production, were also examined.

Sri Lankan leaders have been under pressure from India in the past two decades amid increasing Chinese influence in the island nation as the move is seen as a security threat to India, analysts say. (Colombo/Jun20/2024)

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