The study examines how the twenty-first century rivalry between major powers in the Indian Ocean Region (IOR)—China, India, and the United States of America (US)—has complicated Sri Lanka’s pursuit of an independent foreign policy and constrained its diplomatic leverage. It reviews the foreign policy postures approximating bandwagoning and balancing adopted by Sri Lanka in the early years since independence when the stated policy was neutrality/non-alignment, and traces the drift particularly since the ending of LTTE terrorism in 2009 which is more akin to hedging. It argues that the key flashpoints in Sri Lanka’s relations with the 3 powers presents a complex mix of interconnected factors; geo-politics, geo-economics, existential defence and economic imperatives, as well as the multilateralization of human rights and governance issues, which has impinged on foreign policy decision-making. A contemporary reality facing Sri Lanka is that even on occasions that Sri Lanka has sought to adopt a centrist foreign policy approach, this has not been respected, and countries/blocs have engaged in a “zero-sum game” and brought pressure on Sri Lanka to fall within their exclusive “spheres of influence”. Notwithstanding the material loss and emotional strain that had to be endured by the Sri Lankan polity, the politico-economic crisis of 2022 is regarded as having temporarily provided a positive disruption in arresting this trend, although this strategic space might be nearing its end. The study posits that overcoming the “zero-sum” push will be the crucial test for Sri Lanka foreign policy in the foreseeable future, in order to avoid the predicament of Sri Lanka becoming a theatre for confrontation between the major powers.