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Iran, Sri Lanka Strengthen Economic & Security Ties

By Nigar Bayramli February 23, 2024

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Sri Lankan Prime Minister Dinesh Gunawardena and visiting Iranian Minister of Foreign Affairs Hossein Amir-Abdollahian discussed the expansion of close bilateral ties in Colombo, Sri Lanka, on February 20, 2024. / Daily News

The Iranian foreign minister and high-ranking officials from Sri Lanka have recently engaged in discussions regarding bilateral cooperation across various sectors, including energy, trade, maritime security, and investment.

President Ranil Wickremesinghe highlighted Sri Lanka’s strategic importance in the Indian Ocean, emphasizing the nation’s commitment to ensuring freedom of navigation, particularly in the Persian Gulf. This commitment underscores the critical role of the Persian Gulf in the broader context of Indian Ocean security.

India commenced nine-day naval drills on its southern coast on February 19, with participation from over 50 navies. These drills come amid growing global concerns over security challenges in the Red Sea, such as increasing incidents of drone attacks and piracy.

During his visit to Sri Lanka from February 19 to 21, Iranian Foreign Minister Hossein Amir-Abdollahian expressed Tehran’s dedication to exploring avenues for expanding economic cooperation with the South Asian country. This meeting underscored the commitment of both nations to address regional conflicts and promote mutual interests through diplomatic dialogue and cooperation.

Following discussions with his Iranian counterpart, Sri Lankan Foreign Minister Ali Sabry stated that they “had extensive discussions on further strengthening our cooperation in multiple areas, including the energy sector.” He further added that they “agreed to work closely and enhance our partnership further.”

In response, the Iranian minister affirmed his country’s commitment to safeguarding shipping in the Gulf and the Indian Ocean, noting the recent deployment of two Iranian warships off Sri Lanka’s coasts for this purpose. Additionally, Amir-Abdollahian announced the opening of a 100 MW power plant built by Iranian companies in Sri Lanka.

Furthermore, during a meeting with Prime Minister Dinesh Gunawardena on February 20, discussions focused on expanding bilateral cooperation in trade and investment. Both sides agreed to explore trading in Asian currencies instead of US dollars. Gunawardena expressed gratitude to Iran for its support of the Uma Oya hydro-electricity project, which is expected to significantly bolster the nation’s power grid and agricultural capabilities.

Regarding trade, Sri Lanka and Iran are exploring avenues to expand oil trade despite US sanctions. An informed source familiar with the discussions stated that “some oil transactions take place through third parties, but the two decided to explore the possibility of expanding trade despite US sanctions.” 

Sri Lanka initiated bartering tea to Iran last year in lieu of $250 million owed for previously purchased oil. Previous agreements also stressed the importance of maintaining communication between the central banks of both countries to facilitate necessary arrangements.