India and the United Arab Emirates have agreed to develop an energy hub in Sri Lanka, as New Delhi strengthens its ties with Colombo amid growing competition with China. The agreement was signed during Indian Prime Minister Narendra Modi’s visit to Sri Lanka.
The energy hub will be built in the city of Trincomalee, a natural harbour in Sri Lanka’s east, and involves the construction of a multi-product pipeline. The project may also include using a World War Two tank farm partly held by the Sri Lankan subsidiary of Indian Oil Corp.
India has been increasing its presence in Sri Lanka since the country’s severe financial crisis triggered in 2022. New Delhi provided $4 billion in financial assistance, while China has signed a deal to build a $3.2-billion oil refinery in Hambantota.
The energy hub will boost India’s influence in the region and provide a counterbalance to China’s growing presence. The UAE is a strategic partner for India in the energy space, and its involvement marks an important development in India-Sri Lanka relations.
India and Sri Lanka have also signed agreements on power grid connectivity, digitalisation, security, and healthcare. These deals aim to deepen ties between the two nations and address pressing issues such as debt restructuring.
Source: https://www.reuters.com/world/asia-pacific/india-uae-develop-sri-lanka-energy-hub-delhi-competes-with-china-influence-2025-04-05