Colombo, April 05, 2025 – In a bold move to counterbalance China’s growing influence in the Indian Ocean, India and the United Arab Emirates have partnered with Sri Lanka to establish a cutting-edge energy hub in the island nation. The tri-nation agreement, signed during Indian Prime Minister Narendra Modi’s landmark visit to Sri Lanka on Saturday, marks a significant step in deepening ties between New Delhi, Colombo, and Abu Dhabi, while amplifying India’s strategic presence in the region.
The energy hub, slated for development in Trincomalee—a strategically vital eastern port city with a natural deep-water harbor—aims to transform Sri Lanka into a key energy player. The project includes plans for a multi-product pipeline and the potential revival of a World War II-era tank farm, partially owned by the Sri Lankan arm of Indian Oil Corp. Indian Foreign Secretary Vikram Misri, speaking to reporters in Colombo, described the UAE as an “ideal partner” due to its expertise in the energy sector. “This is a pioneering effort in the region, and the UAE’s role will take shape as business discussions progress,” Misri noted.
The pact comes as Sri Lanka emerges from a crippling financial crisis that began in 2022, with India playing a pivotal role by extending $4 billion in aid. Meanwhile, China has been flexing its economic muscle, with its state-owned Sinopec securing a $3.2-billion deal to construct an oil refinery in Hambantota, a southern port city long associated with Beijing’s Belt and Road Initiative. The Trincomalee energy hub signals a direct challenge to China’s ambitions, positioning India and its allies as key stakeholders in Sri Lanka’s economic recovery.
Beyond the energy hub, Modi’s visit—the first by a global leader since Sri Lankan President Anura Kumara Dissanayake assumed office in September—yielded further dividends. India and Sri Lanka finalized their debt restructuring, addressing Colombo’s $1.36 billion obligation to Indian lenders. The leaders also launched a $100 million solar power project, a collaboration between Ceylon Electricity Board and India’s National Thermal Power Corp, underscoring New Delhi’s commitment to sustainable development in the region.
Additional agreements on power grid connectivity, digital infrastructure, security, and healthcare cemented the growing partnership. As Sri Lanka navigates its post-crisis future, the India-UAE-Sri Lanka alliance could reshape the geopolitical landscape of the Indian Ocean, with Trincomalee emerging as a linchpin in this high-stakes energy and influence game.
