Modi at the Crossroads: What His Next Move Could Mean for Sri Lanka

With Donald Trump’s tariff hammer hitting Indian exports, Prime Minister Narendra Modi is facing one of the trickiest diplomatic balancing acts of his decade in power. For Sri Lanka, the outcome isn’t just an overseas curiosity — it could shape trade, investment, and even Colombo’s place in Asia’s shifting power map.

Three Roads Before Modi

Right now, Modi has three possible strategic paths:

Double Down on the U.S. Partnership

Modi could attempt to smooth things over with Washington, offering trade concessions or scaling back Russian oil imports to win back favour. This would keep India in the U.S.-led camp, but could mean less enthusiasm for projects under BRICS or China’s Belt and Road — and Sri Lanka might see reduced Indian interest in joint ventures that involve Chinese capital.

Tilt Towards China and BRICS Allies

If Trump refuses to back down, Modi may deepen economic ties with China, Russia, and Brazil, accelerating projects in green tech, shipping, and supply chain resilience. For Sri Lanka, that could mean more Indian involvement in regional infrastructure alongside Beijing — potentially creating both opportunities and rivalries in Colombo Port, Hambantota, and Trincomalee.

Play the Non-Aligned Middle Game

Modi could attempt the “best of both worlds” approach — keeping U.S. defense and tech ties while expanding trade with BRICS. This would give Sri Lanka a chance to court investment from both Indian and Chinese-backed projects. But it risks India being seen as unreliable by both sides, leaving Colombo unsure which way New Delhi leans.

Sri Lanka’s Stake in Modi’s Choice

Sri Lanka’s economy is tightly interwoven with India’s — from essential imports to tourism flows and power-grid connectivity projects. If India leans heavily toward China, Sri Lanka could become part of a broader South Asian economic bloc less dependent on the U.S. If Modi reconciles with Washington, Sri Lanka might face more competition for U.S. market access and investment.

The danger for Sri Lanka is if India ends up in an awkward diplomatic no-man’s land — not fully trusted by Beijing, sidelined in Washington, and over-reliant on its own domestic market. That would reduce India’s ability to act as a bridge for Sri Lanka in global trade negotiations and multilateral financing.

The AKD Factor

Closer to home, President Anura Kumara Dissanayake (AKD) will be watching Modi’s moves carefully. If Modi manages to pull off a deft balancing act, AKD could position Sri Lanka as a regional connector — playing both Indian and Chinese interests for maximum gain. But if Modi stumbles, Sri Lanka might find itself without a powerful advocate in either major camp, leaving Colombo more exposed to pressure from Beijing and Washington alike.

Bottom Line

For Sri Lanka, Modi’s next steps aren’t just an India–U.S.–China story — they’re a blueprint for how Colombo navigates its own foreign policy in a world where allegiances shift quickly. A confident, well-connected Modi could be a powerful partner. A weakened, isolated Modi could force Sri Lanka into more high-risk balancing acts of its own.