The country is reconfiguring its military policy toward Sri Lanka and is exhibiting a more supportive stance toward the government's efforts against the Liberation Tigers of Tamil Eelam (LTTE).

In March, India invited Sri Lankan Army Commander Lieutenant-General Sarath Fonseka to visit and tour Indian operations along the India-Pakistan border. The Sri Lankan general also met with Indian Army General Deepak Kapoor as well as Defense Minister AK Antony, and there was discussion on security measures to eradicate terrorism as well as talks on possible cooperation between India and Sri Lanka.

The visit promoted India's anti-insurgency capabilities while highlighting the common themes and culture that the two militaries share.

Fonseka also visited with India's Lieutenant-General KS Yadava, commander of the Indian Infantry School and both leaders shared information on new warfare strategies. Prior to his departure, Fonseka visited with Sri Lankan Army Officers involved in training at India's Army War College in Madhya Pradesh.

Due primarily to reported human rights violations and a large and supportive Tamil population within its own borders, the Indian government has refrained from directly supporting the Sri Lankan military with offensive weapons systems for use against the LTTE. Instead, it has chosen to provide Sri Lanka with certain defensive military capabilities such as critical intelligence information and radar systems for use in detecting LTTE aircraft.

Recently, however, this stance has begun to change.

India has already begun to play a much larger role in naval security and operations. Likewise, a report issued on 6 June 2007 in the Times of India stated that New Delhi was seriously considering increasing its support and drastically upgrading its military aid to Sri Lanka to include offensive capabilities.

This increase in support is likely a result of India's growing concern over Chinese influence in Sri Lankan military affairs.

In April 2007, Sri Lanka signed a US$37.6 million classified arms deal with Chinese defense manufacturer Poly Technologies to provide supplies of ammunition and ordnance for its army and navy, in addition to varied small arms for the defense forces. A second Chinese arms agreement provides Sri Lanka with a JY 11 3D radar system, developed by China National Electronics Import Export Corp for US$5 million.

It is likely that India views these weapons contracts as security risks as well as a serious encroachment into its sphere of influence. In June 2007, Indian National Security Advisor AK Narayanan publicly insisted that Sri Lanka should not approach Pakistan or China. for weapons. India also likely understands that in order to retain and increase its power position in South Asia it needs to improve relations with Sri Lanka and increase military support for the Sri Lankan government.

The Chinese are in competition for Sri Lanka due to the island's strategic location near important shipping routes.. China sees these sea lanes as vital because its energy supplies pass through the Indian Ocean region. Sri Lanka's proximity to the Indian mainland is also attractive. Chinese analysts appear to view India as a future competitor and advocate a comprehensive strategy focusing on containing Indian influence. Such a strategy will utilize economic tools such as aid, trade and infrastructural development as well as enhanced military cooperation with pro-China countries like Sri Lanka.

The threat of Sri Lanka's weapons procurement via Chinese arms deals, although important, is only a segment of Chinese interaction in Sri Lanka. China is increasing the volume of its investments there, and in 2007 Chinese assistance grew fivefold to nearly US$1 billion, surpassing Japan, Sri Lanka's formerly largest economic supporter.

China has entered into recent explorations for oil in Sri Lanka, as well as providing support for the construction of new port and bunker facilities at Hambantota. The new port facilities will cost an estimated US$360 million, and a portion of the project has already begun with Chinese assistance.

It is estimated that the Chinese see their stake in this project not only as a method to gain support with the Sri Lankan government but also as a way to procure a strategic position on the primary East-West trade route that lies just six nautical miles away. The Chinese are also involved in building a US$60 billion stretch of highway that leads to the northeast area of the island and are funding the development of a coal power plant that they hope will generate 20 gigawatts by the year 2020.