General Studies IIIndia and NeighborhoodINTERNATIONAL RELATION

Trincomalee Oil Tank Farms


In the coming days, India and Sri Lanka are going to sign the long pending deal to jointly develop the Trincomalee oil tank farms.

About Trincomalee Oil Tank Farms

  • The facility, built by the British around World War II as a refueling station, has 99 storage tanks that look like giant wells.
  • It is located in ‘China Bay’ in close proximity to the internationally coveted deep water natural harbour of Trincomalee.
  • 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.
  • In 2003, Indian Oil Corporation set up its Sri Lankan subsidiary called Lanka IOC, to work on this oil farm.
  • Currently, Lanka IOC runs 15 tanks. The new agreement is being negotiated for the remaining tanks.

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).

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.

Issues in India-Sri Lanka Relations

  • China’s Intervention: China’s rapidly growing economic footprint (and political clout as a corollary) in Sri Lanka is straining India-Sri Lanka relations.
    • China is already the largest investor in Sri Lanka, accounting for 23.6% of the total Foreign Direct Investment (FDI) during 2010-2019 as against 10.4% from India.
    • China is also one of the largest export destinations for Sri Lankan goods and holds over 10% of its external debt.
    • China is also handling Hambantota Port of Sri Lanka, the port is viewed as a part of China’s String of Pearls Strategy.
  • Katchatheevu Island Issue: India ceded the uninhabited island to its southern neighbour in 1974 under a conditional accord.
    • However, many times the fisherman issue arises more out of a domestic tussle rather than the India-Sri Lanka view on the issue.
  • 13th Amendment of the Sri Lankan Constitution: Indo-Sri Lankan Accord was signed in 1987 to provide a political solution to Sri Lanka’s conflict.
    • It envisages devolution of necessary powers to the provincial councils to address the just demand of the Tamil people for equality, justice, peace, and respect within a united Sri Lanka.
    • The provisions of this accord were made in the Sri Lankan constitution, by the Thirteenth Amendment.
    • However, still the provisions are not implemented on ground. Even to this day, s lot of Srilankan Tamils who evaded from Srilankan civil war (2009) are seeking refuge in Tamil Nadu.
  • Back Tracing of Sri-Lanka: Recently, Sri Lanka backed out from a tripartite partnership with India and Japan for its East Container Terminal Project at the Colombo Port, citing domestic issues.

Way Forward

  • Nurturing the Neighbourhood First policy with Sri Lanka is important for India to preserve its strategic interests in the Indian Ocean region.
  • Indian foreign policy towards Sri Lanka, as part of its ‘Island Diplomacy’, will also have to evolve in tune to the emergent realities and threats.
  • Both countries can also cooperate on enhancing private sector investments to create economic resilience.

India-Sri Lanka Cooperation: Recent Developments

  • Four-Pillar Initiative: Recently, India and Sri Lanka agreed to a four-pronged approach to discuss initiatives on food and energy security to help mitigate Sri Lanka’s economic crisis.
    • This Four-Pillar Initiative comprises Lines of Credit, currency swap agreement, Modernisation Project (like The Indian Housing Project) and Indian Investments.
  • Joint Exercises: India and Sri Lanka conducted joint Military (Mitra Shakti) and Naval exercise (SLINEX).
  • Participation in Groupings: Sri Lanka is also a member of regional groupings like BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) and SAARC in which India plays a leading role.
  • SAGAR Vision: Srilanka supports India’s concern for the security of the Indian ocean with its ‘Neighbourhood First’ policy and SAGAR (Security and Growth for all in the Region).

Source: The Hindu

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