What Happened
- Sri Lankan President Anura Kumara Dissanayake called Prime Minister Narendra Modi on March 24, 2026, to discuss the escalating situation in West Asia and its impact on global energy security.
- The two leaders focused on disruptions to global and regional supply chains arising from the Iran-Israel conflict, particularly the near-blockade of the Strait of Hormuz by Iran.
- They reviewed progress on key initiatives under the India-Sri Lanka energy cooperation framework, including HVDC grid interconnection for bilateral power trade.
- Both leaders reiterated the importance of keeping international shipping lanes open and secure, calling it a matter of global interest.
- Modi reaffirmed India's commitment to working closely with Sri Lanka under India's "Neighbourhood First" policy and the MAHASAGAR Vision.
- The call was set against the backdrop of Sri Lankan President Dissanayake's earlier comments on Iran that had complicated Colombo's diplomatic positioning, prompting him to clarify India's stance.
Static Topic Bridges
India's Neighbourhood First Policy and MAHASAGAR Vision
India's "Neighbourhood First" policy, a cornerstone of its foreign policy since 2014, prioritises engagement with South Asian neighbours through development assistance, connectivity, and people-to-people ties. Sri Lanka holds a special place in this framework given its geographic proximity (Palk Strait) and historical ties. The MAHASAGAR Vision — Mutual and Holistic Advancement for Security and Growth Across Regions — is PM Modi's framework for maritime cooperation in the Indian Ocean region, announced in 2025. It complements Neighbourhood First by adding a security dimension covering maritime trade, anti-piracy, disaster response, and clean energy connectivity across the Indian Ocean Rim.
- MAHASAGAR: Acronym for Mutual and Holistic Advancement for Security and Growth Across Regions
- Neighbourhood First operationalised through: SAARC/BIMSTEC platforms, bilateral credit lines, development projects, maritime cooperation
- India extended a $4 billion support package to Sri Lanka during its 2022 economic crisis
- India-Sri Lanka signed 10 bilateral agreements including in defence, power, and energy during Modi's 2025 visit to Colombo
- BIMSTEC Energy Centre is based in Bengaluru, coordinating regional grid interconnection
Connection to this news: Modi's invocation of Neighbourhood First and MAHASAGAR in the call signals that the West Asia crisis is being framed not just as a distant conflict but as a direct challenge to India's regional connectivity and energy security architecture.
India-Sri Lanka Energy Cooperation: Grid Interconnection and Trincomalee Hub
India and Sri Lanka have agreed to interconnect their electricity grids via High Voltage Direct Current (HVDC) technology, enabling bilateral power trade. HVDC is preferred for long-distance and submarine cable transmission due to lower line losses and greater efficiency compared to AC systems. The proposed interconnection would make Sri Lanka part of India's growing cross-border electricity trade network (already including Bhutan, Nepal, and Bangladesh). A tripartite MoU involving India, Sri Lanka, and the UAE focuses on developing Trincomalee as a strategic energy hub with a multi-product energy pipeline.
- HVDC interconnection: Enables efficient submarine cable power trade between India and Sri Lanka
- Trincomalee energy hub: Multi-product pipeline, storage facilities, part of India-Sri Lanka-UAE trilateral
- Sri Lanka's power grid: Ceylon Electricity Board (CEB) manages ~4,200 MW installed capacity
- India's cross-border power trade partners: Bhutan (hydro), Nepal (hydro), Bangladesh, and now Sri Lanka
- Renewable energy context: India targeting 500 GW non-fossil capacity by 2030; surplus can be exported
Connection to this news: The energy cooperation reviewed in the Modi-Dissanayake call is precisely this grid interconnection framework — and the West Asia crisis underscores the urgency, as both countries face supply chain disruptions from Hormuz that make alternative energy arrangements more critical.
Strait of Hormuz and Global Energy Security
The Strait of Hormuz, a narrow waterway between Iran and Oman, is the world's most critical oil chokepoint. In 2024, approximately 20 million barrels per day (bpd) passed through it — about 20% of global petroleum liquids consumption. Around 84% of crude oil and condensate through the Strait goes to Asian markets, with India, China, Japan, and South Korea as top recipients. India imports about 85% of its crude oil requirements, with approximately 45% historically routed through the Strait of Hormuz. During the 2026 Iran-Israel conflict, Iran threatened to block the Strait, triggering the biggest supply disruption in decades, sending Brent crude above $100/barrel and straining India's external account.
- Strait of Hormuz: 33 km wide at narrowest point; between Iran (north) and Oman/UAE (south)
- Daily flow: ~20 million bpd (2024) = ~20% of global petroleum liquids
- 20% of global LNG trade also transits the Strait
- India's crude import dependency: ~85% imported; ~45% via Hormuz (pre-crisis estimate)
- Alternative routes: Cape of Good Hope (adds 15+ days); Sumed Pipeline (limited capacity)
- India consumes ~5.5 million bpd; any price spike significantly widens current account deficit
Connection to this news: The Modi-Dissanayake call is directly driven by the Hormuz crisis — both India and Sri Lanka are heavily energy-import-dependent island/peninsula economies facing real-time supply chain disruptions, making the bilateral energy cooperation call timely and strategic.
Key Facts & Data
- Strait of Hormuz: ~20 million bpd crude oil transit daily (2024); 20% of global LNG trade
- India imports ~85% of crude; ~45% historically via Hormuz
- India's MAHASAGAR Vision: Mutual and Holistic Advancement for Security and Growth Across Regions
- India-Sri Lanka HVDC interconnection MoU: signed during Modi's 2025 Colombo visit
- India's $4 billion support to Sri Lanka during 2022 economic crisis
- Trincomalee energy hub: India-Sri Lanka-UAE trilateral MoU
- Brent crude climbed above $100/barrel following Iran-Israel conflict escalation (March 2026)
- BIMSTEC Energy Centre: based in Bengaluru, coordinates regional grid work