Col R Hariharan | Sri Lanka Strategic Perspectives, July 2026 | www.security-risk.com
During the nearly three decades of fighting Tamil separatists and two insurrections by the Janatha Vimukthi Peramuna (JVP), the Sri Lanka armed forces had expanded. In three years of the final instalment of the Eelam, the Sri Lankan Armed Forces had employed approximately 300,000 to 450,000 personnel (across all branches of uniformed forces) to crush around 20,000 cadres of the LTTE.
When President Mahinda Rajapaksa was elected in 2005, military strength was only 125,000. However, by the time the last Eelam war ended in May 2009, the Army had tripled its strength. As the LTTE had a sea presence, the Sri Lanka Navy had expanded to about 48,000 personnel. Sri Lanka Air Force had roughly 28,000 to 30,000 personnel involved in the war. During the final offensive, the SLAF provided vital close-air support and reconnaissance. Nearly 80,000 paramilitary personnel including the Police, the Home Guards etc, were also involved in the final episode of Eelam war.
As the LTTE enigma continued to haunt Sri Lanka politics both internally and externally, Sri Lanka government did not make any serious effort to prune its bloated armed forces. In fact, the country did the exact opposite: it continued to recruit new personnel, maintained a massive standing military, and progressively increased its defence spending during peacetime.
When the island nation was going broke from months of food and fuel shortages in January 2023, the Ranil Wickremesinghe government announced that Sri Lanka will slash its army by a third to 135,000 personnel by 2024. The aim was to reduce it to 100,000 by 2030, the state minister of defence has said, as the country tried to cut costs.
President Anura Kumara Dissanayake, while addressing the Galle District Special Co-ordination Committee Meeting held on July 28, said four months after presenting a budget, it was not justifiable, from the perspective of the public, to allocate a larger share of resources towards maintaining Government operations. Accordingly, he noted the recurrent expenditure, which currently stands at 9%, while increasing capital expenditure, currently at 4%, to support greater investment in development.
The President further stated that plans are in place to allocate Rs.2 trillion for capital expenditure in 2027, representing an increase of approximately 40%.
President Dissanayaka was referring to Sri Lanka's 2026 national budget which was approved by the Parliament on 5 December 2025. In the approved estimates for the financial year 2026, total government expenditure is projected at SLRs 8.9tn ($30bn) for the year. This represents an increase of 1.6% as compared to the 2025 budget. Of the total, recurrent expenditure is estimated at SLRs 5.7tn ($19.1bn) and capital expenditure at SLRs3.3tn ($10.9bn).
Most of the Ministry of Defence budget goes for recurrent expenditure, and this year $1.29 billion was allocated for that purpose. Only about $203 million has been allocated for capital expenditure. The bulk of the Ministry of Public Security budget (about $540 million) has also been earmarked for recurrent expenses.
During his speech in Parliament as the Minister of Defence, President Anura Kumara Dissanayake said that his government is committed to the decision taken by the previous government to reduce troop numbers.
“Our vision is to develop a technologically advanced military with a smaller yet more effective force by 2030. We plan to limit the size of our army to 100,000, the Air Force to 18,000, and the Navy to 40,000,” he said.
Progress in manpower reductions
Sri Lanka has made considerable progress in the military downsizing and technological modernization blueprint it had announced in January 2023. Though the blueprint was designed to pull the nation out of its worst financial crisis, its aim was to convert the bloated civil-war era armed forces into a streamlined, high-tech defence asset by 20230.
In a small country like Sri Lanka, armed forces are a source of government employment. So to prevent mass unemployment and social destabilisation that follows, the Ministry of Defence is said to have avoided haphazard layoffs. Instead, natural retirements and a strict attrition-based hiring freeze is being followed. This has enabled the intake of recruits to be kept below the number of outgoing retirees.
The structural changes follow a phased implementation schedule to achieve the aim by 2030. This involves aggressively trimming personnel costs, which had historically accounted for half of the entire public safety bill.
According to reports the Army has successfully met its interim target of shrinking active strength from over 200,000 personnel to 135,000. The final objective will be to further tighten it to 100,000 soldiers by 2030.
On the other hand, the Navy and the Air Force do not face such giant cuts. They have to systematically rebalance their rank and file. The SLN is on track to maintain a streamlined force of 40,000 sailors. The Air Force, on the other hand is settling roughly 18,000 to 30,000 to focus on Exclusive Economic Zones (EEZ) for maritime patrolling and anti-piracy operations.
Budget realities of technological modernisation
According to the restructuring blueprint, the money saved from wages was to fund technical upgrades. However, the realities of the domestic fiscal state with currency fluctuations and rising cost of defence modernization has resulted in increased defence allocations to SLRs 437 billion. This has made Sri Lanka heavily rely on international partnership.
Luckily, Sri Lanka enjoys a lot of international goodwill that has enabled it to acquire capital equipment as bilateral aid. India has provided a $5 million defence aid package for supply of advanced military stores, a trauma care system and vehicle fleets. India has also replaced a Navy Dornier maritime surveillance aircraft to boost its aerial surveillance of its EEZ.
The US has completed a $3 million equipment transfer to SLAF delivering critical air mobility gear, C-130 aircraft spares and paving the way for Beechcraft King Air 360 ER aircraft integration to enhance maritime security.
China’s strategy
While Western nations and India have focused on providing Sri Lanka modern maritime surveillance assets, Beijing has adopted a multi-pronged approach to Sri Lanka armed forces downsizing and technological modernisation. The three facets of China’s role are economic facilitation, hardware supply and extensive military training.
China is Sri Lanka’s largest single bilateral creditor in 2022; so China’s agreement to restructure its debt enabled Sri Lanka to secure a $2.9 billion bailout package from the International Monetary Fund (IMF).This indirectly helped Sri Lanka to go through its armed forces reform.
Sri Lanka is dependent upon China for affordable, high-end defence hardware. This has enabled SLN to go ahead with naval fleet upgrades. For instance China delivered additional Type 053H2G frigates under a special transfer of technology arrangement. These are vital for Sri Lanka to patrol sea lanes of communication and prevent smuggling. SLAF has inducted China-built Harbin Y-12 IV aircraft to maintain tactical mobility with a smaller standing workforce.
China has continued to provide direct material aid. These include a RMB 10 million ($1.4 million) supply package to the Ministry of Defence to subsidize its operational equipment cost. As Sri Lanka Army downsizes its personnel toward the 100,000 strength, it requires a highly specialized, technically capable officer corps to operate its modernizing systems. China has stepped in to fill this training gap: China has absorbed a "considerable number" of junior, middle-grade, and senior Sri Lankan military officers into its defence academies for advanced technological and strategy courses.
The President has the thankless task of pruning the bloated armed forces, while it continues to be relevant to the dynamic changes taking place in the strategic sphere. But downsizing an army is a delicate task, particularly if one wants it to be ready to perform in a sensitive strategic zone like the Indian Ocean.
I hope President Dissanayaka remembers what US Army General Omar Bradley said on handling armed forces. He said, "An army is a delicate mechanism, not a mechanical structure that can be easily dismantled and rebuilt. You cannot prune the armed forces without weakening the entire defence posture of a nation.”
[Col R Hariharan VSM, a retired MI specialist on South Asia and terrorism, served as the head of intelligence of the Indian Peace Keeping Force in Sri Lanka 1987-90. He is associated with the Chennai Centre for China Studies. Website: https://.col.hariharan@net Email:haridirect@gmail.com,]
