The Pahalgam attack on April 22, 2025 reignited the nuclear-tinged historical rivalry between India and Pakistan, raising concerns about regional stability. If the situation escalates into armed conflict, Sri Lanka, as a regional actor with historical and current ties to both countries, could face significant geopolitical, economic, and security repercussions. This article thus explores the implications of a possible inter-state conflict on South Asia and particularly on Sri Lanka, drawing on the complex history of the India-Pakistan conflict and Sri Lanka’s evolving role in South Asian geopolitics.
History of India-Pakistan Conflict
Looking back at the history of this rivalry, since independence from Britain in 1947, India and Pakistan have engaged in four major wars and numerous skirmishes, with the disputed territory of Kashmir at the heart of their rivalry. Key milestones include the: First Kashmir war (1947-1948), triggered by Pakistan-backed tribal incursions into Kashmir, leading to the Maharaja’s accession of the region to India and the establishment of the Line of Control (LoC) following a UN-brokered ceasefire; Second Kashmir war in 1965 sparked by border clashes and Pakistan’s Operation Gibraltar in Kashmir, ending in a military stalemate and the Tashkent Agreement; Third Kashmir war in 1971 centered on the Bangladesh Liberation movement, which resulted in the creation of Bangladesh and a decisive Indian victory and Kargil war in 1999 marked by Pakistani infiltration in Kargil, Ladakh, and intense fighting at high altitudes, with India regaining lost ground and Pakistan facing diplomatic isolation. These conflicts have thus entrenched a legacy of distrust, militarization, and nuclear brinkmanship in South Asia.
Impact on South Asia: A Region at Crossroads
The 21st century has been hailed as the ‘Century of Asia’, with South Asia poised to leverage its demographic dividend and economic potential. However, an India-Pakistan conflict could shatter this vision, exacerbating existing vulnerabilities. The nuclear brinkmanship with both nations possessing nuclear arsenals, and heightened tensions risk accidental escalation, as seen during the 1999 Kargil War and 2019 Balakot crisis.
A potential crisis could also spur economic disruption in the region risking South Asia’s intra-regional trade (less than 5% of total trade) to collapse further, particularly if India-Pakistan border closures and airspace restrictions persist. The China-Pakistan Economic Corridor (CPEC), which traverses disputed Kashmir, could become a flashpoint, drawing China deeper into the conflict. It could also lead to humanitarian crises such as the triggering of refugee flows, straining of resources, and the revival of ethnic tensions, particularly affecting marginalized communities in Kashmir and border regions.
The potential rivalry could also result in an institutional paralysis leading regional organizations like the South Asian Association for Regional Cooperation (SAARC), already weakened by the clash of the two, to face irrelevance, stalling initiatives like the South Asian Free Trade Agreement (SAFTA).
Sri Lanka’s Role in the Prolonged Conflict
Sri Lanka has historically played a nuanced and pragmatic role throughout the rivalry between its two neighbours, often leveraging its position to maintain autonomy and serve its national interests while navigating the sensitivities of both regional powers. In the 1971 India-Pakistan war, under Prime Minister Sirimavo Bandaranaike, Sri Lanka notably allowed Pakistani civilian and military aircraft to refuel and use Colombo as a stopover, after India denied Pakistan overflight rights. This was a significant move since it enabled Pakistan to maintain air links with its eastern territory (now Bangladesh) while underscoring Sri Lanka’s willingness to assert its sovereignty and its non-aligned foreign policy —even at the risk of displeasing India, its much larger neighbour. The balancing act was furthermore visible with Sri Lanka maintaining strong diplomatic and economic ties with India despite providing Pakistan with logistical support.
What a Renewed Conflict could mean to Sri Lanka?
Thus, predicting what impact a possible conflict could have on Sri Lanka, as a fragile small power, a renewed conflict could force Colombo into a precarious diplomatic balancing act. It would compel Sri Lanka to avoid overt alignment, risking alienation from either power or both.
● Security and Strategic Autonomy
An India-Pakistan war would heighten regional insecurity, potentially drawing Sri Lanka into the conflict’s periphery. The island’s proximity to India and its reliance on Indian goodwill for security and economic stability would limit its foreign policy flexibility. Sri Lanka might face pressure to align with India, risking its defense ties with Pakistan and complicating its non-aligned stance. Furthermore, worsening the crisis, such a conflict could invite greater involvement from external powers (China, the US), with Sri Lanka potentially becoming a site for strategic competition, especially given its ports and location along key maritime routes. This potential involvement would also make the country’s act of balancing even complicated, with Sri Lanka’s increased alignment with India economically and diplomatically, particularly given China’s entrenched support for Pakistan and its footprint in Sri Lanka in terms of debt and investments.
The escalation of the potential conflict could also lead to possible dilemmas for Sri Lanka. If China intensifies military support to Pakistan, India might pressure Sri Lanka to restrict Chinese naval access to Hambantota emphasizing the threat to India’s security, testing Colombo’s diplomatic agility. Given the potential support of the US to India, enhanced Quad cooperation could offer Sri Lanka alternative investments, reducing reliance on China but requiring alignment with Western strategic interests on the other hand.
● Economic Vulnerabilities
Sri Lanka’s economy, still recovering from its 2022 debt crisis, remains fragile. A regional conflict could disrupt maritime trade routes in the Indian Ocean, affecting Sri Lanka’s ports, which handle transshipment for both India and global markets. Furthermore, tourism—a critical revenue source—could suffer due to perceived instability, echoing declines seen during the country's civil war. Additionally, rising oil prices from conflict-driven market volatility would strain Sri Lanka’s import-dependent economy further.
● Humanitarian and Diplomatic Fallout
A protracted conflict could exacerbate refugee flows to Tamil Nadu, indirectly affecting Sri Lanka through heightened sensitivities around Tamil minority rights. Colombo might also face pressure to condemn cross-border terrorism, aligning with India’s stance, while avoiding actions that could legitimize Pakistan’s position.
Sri Lanka’s Tightrope: Navigating Indo-Pak Conflict
At an hour of a renewed rivalry between India and Pakistan, Sri Lanka’s best strategy is to maintain a pragmatic, balanced, and non-aligned foreign policy, leveraging its geostrategic location to attract investment and security cooperation from multiple powers without becoming a proxy or flashpoint in their rivalries.
At an hour of foreign policy dilemma, it is vital that Sri Lanka emphasizes balanced engagement and sovereignty. Sri Lanka’s leadership has repeatedly articulated a desire to remain neutral and avoid entanglement in great power rivalries, as reflected in statements emphasizing non-alignment and the prioritization of national sovereignty. This approach allows Sri Lanka to maintain flexibility and avoid being drawn into the strategic competition between India and China, both of whom have substantial interests in the island—India as a regional hegemon and China as part of its Belt and Road Initiative (BRI).
The country could reinforce its neutrality through proactive diplomacy. It could publicize its non-aligned stance by issuing immediate statements emphasizing Sri Lanka’s neutrality, drawing from its historical non-aligned movement roots. Declare Colombo as a potential venue for peace talks, leveraging its 1971 precedent of facilitating dialogue during crises.
Sri Lanka could also activate regional platforms by using the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) or SAARC forums to advocate de-escalation, positioning Sri Lanka as a mediator while highlighting shared regional interests in maritime security and economic stability to rally consensus.
The strengthening of ties with regional organizations like SAARC and BIMSTEC would also aid in ensuring economic safety and trade continuity for Sri Lanka. This “concentric circles” approach places geographic neighbours at the center of engagement, which helps assuage Indian security concerns while still allowing space for economic cooperation with China and others.
The country could also leverage its strategic location for multilateralism at an hour of crisis. Sri Lanka’s position at the crossroads of major maritime routes gives it leverage to act as a hub for trade, logistics, and regional connectivity. By promoting itself as a neutral venue for dialogue, maritime cooperation, and disaster response, Sri Lanka can attract investment and security partnerships from a range of actors, including the US, Japan, and the EU, in addition to India and China. This multilateral approach reduces overdependence on any single power and increases Colombo’s diplomatic capital.
Conclusion
In a nutshell, the India-Pakistan conflict, amplified by external power rivalries, threatens to fracture South Asia’s fragile cohesion. For Sri Lanka, the crisis underscores the perils of multipolarity: economic dependencies and strategic alignments leave little room for autonomy. Its survival in an India-Pakistan war hinges on active neutrality, economic pragmatism, and multilateral hedging. By leveraging its geostrategic location, historical non-alignment, and partnerships with extra-regional powers, Sri Lanka can insulate itself from direct fallout while positioning itself as a facilitator of regional stability. The goal must be to emerge as an indispensable intermediary rather than a collateral casualty. Thus, unless regional leaders prioritize dialogue over brinkmanship, the promise of an Asian Century risks being eclipsed by perennial conflict and geopolitical fragmentation.
