Foreign Policy Watch: India-Sri Lanka

Trincomalee Oil Farms Deal


From UPSC perspective, the following things are important :

Prelims level: Trincomalee oil field

Mains level: Indian infrastructure projects in SL

After a year of negotiations, Sri Lanka will ink the deal with India to jointly develop the Trincomalee oil tank farms — a coveted project that has remained controversial for decades.

About Trincomalee oil field

  • The facility, built by the British around World War II as a refueling station, has 99 storage tanks that look like giant wells.
  • They have a capacity of 12,000 kilolitres each.
  • Eighty-four of those are in the 800-acre Upper Tank Farm (UTF). For a good part of a century now, these tanks have remained unused, shrouded in a forest.
  • The Lower Tank Farm (LTF) has 16 tanks, spread across 50 acres.

Historical background

  • Trincomalee harbor is the second deepest natural harbor in the world.
  • The British who were in control of the island decided to make this as their primary logistics station in the east after World War I.
  • It is also a lesser-known but important logistic station during World War II.
  • British started the oil storage project in 1924 and completed in late 1930s.
  • After that it was abandoned by the British in 1948 when Sri Lanka gained independence.
  • In 2002, the development of this tank farm was revived by an Indian company Indian Oil Corporation (IOC).

History of India’s interest in Trincomalee

  • The development of the Trincomalee Oil Tank farm has been a recurring talking point in Indo-Lanka relations since 1987.
  • It was first mentioned in the Indo- Lanka Accord signed by PM Rajiv Gandhi and President Jayewardene.
  • Despite that, nothing really took off until 2003, when Indian Oil Corporation set up Lanka IOC, its Sri Lankan subsidiary.
  • The agreement remained dormant for years, until the Sirisena- Wickremesinghe administration tried revisiting it through the 2017 MoU.

Significance of Trincomalee

  • Demography: Trincomalee is home to 3.7 lakh Muslim, Tamil and Sinhala people and Trincomalee, in Sri Lanka’s post-war years.
  • Tourism: It has emerged as a favorite destination for surfers from around the world, gradually transforming with plush resorts and restaurants dotting its coast.
  • Important sea route: Trincomalee remains in spotlight as a potential transit point for international trade routes, particularly drawing India which has known strategic interests there.
  • Balancing China: From India’s geostrategic viewpoint, Trincomalee is an important counterbalance to the southern Hambantota Port backed substantially by China.

Hurdles to the Project

  • Public resistance: India-backed projects in Sri Lanka tend to draw way more public resistance from nationalists among the majority Sinhalese constituency than projects with Chinese or American involvement.
  • Anti-India sentiments: Observers in Sri Lanka attribute this to the “baggage” that Indian diplomacy carries, years after its intervention during different stages of Sri Lanka’s civil war.


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