The United States Agency for International Development (USAID) is reportedly evaluating the broader implications of Indian conglomerate Adani Group’s infrastructure project in Sri Lanka. Adani’s involvement in Sri Lanka has been under scrutiny as it reflects India’s strategic push to counter Chinese influence in the region. The port development project, awarded to Adani by the Sri Lankan government, is considered pivotal for regional trade and geopolitics, but its ramifications extend beyond economic benefits.
Adani’s project in Sri Lanka aligns with India’s “Neighborhood First” policy, aiming to strengthen ties with its neighbors while limiting China’s growing clout. Sri Lanka, strategically located along major shipping lanes, is a critical point in the Indian Ocean Region. For India, ensuring a friendly and stable Sri Lanka is essential to counter China’s Belt and Road Initiative (BRI) investments, particularly in ports like Hambantota. However, the U.S. is assessing how such projects impact regional stability and align with its Indo-Pacific strategy.
While India views Adani’s venture as a strategic asset, concerns over environmental, social, and governance (ESG) compliance have emerged. USAID, which often plays a role in advising on development projects in emerging economies, is likely to examine the transparency and sustainability of the project. Questions about community displacement, ecological impact, and adherence to international standards are central to this evaluation. Ensuring such projects benefit the local population and adhere to global norms is critical to their success.
For Sri Lanka, the Adani-led initiative offers much-needed foreign investment at a time when the country is grappling with economic instability. However, balancing the interests of major powers—India, China, and now the U.S.—presents a diplomatic challenge. Adani’s project could redefine the power dynamics in the Indian Ocean, influencing trade, security, and regional alliances.
