In the post–Cold War era, the diplomacy of small states has played a vital role in shaping global economic relations and interactions with major powers. Small states, which constitute nearly two-thirds of United Nations members, including Sri Lanka, remain integral to the international system. Sri Lanka’s foreign policy operates within a complex political and economic environment shaped by its relations with both India and China. These delicate ties often generate strategic anxieties among the two regional powers, influenced by shifts in Sri Lanka’s domestic politics and broader South Asian stability. This chapter examines Sri Lanka’s economic and security cooperation with China and India, exploring how Colombo balances its engagement between these competing powers. It asks two key questions: What strategic and economic advantages does Sri Lanka seek in maintaining relations with both China and India? And do these geo-economic strategies ultimately benefit Sri Lankan citizens? The study draws on both primary and secondary sources, including interviews with Sri Lankan diplomats in New Delhi and Beijing, to provide a multidimensional understanding of this triangular relationship.