From the mid 1950s to early 1980s, there was hardly any dispute between the two countries on matters of security and sovereignty. There had been negotiated settlement of bilateral issues e.g. the question of jurisdiction over Kachathivu Island in the middle of the Palk Straits. One of the main disputes between India and SriLanka has been regarding the political status of Tamil people of Indian origin taken to SriLanka by the british as plantation labourers. 

There are four groups of Sri Lankan Tamil population,

• ancient Tamils in the Jaffna peninsula, 
• professional elite Tamil in urban areas 
• non-Hindu Tamils and 
• Tamil immigrant labour.

The long standing problem of accepting the Tamil speaking population of Sri Lanka as its citizens and giving them regional autonomy could not be solved. The majority of Sinhalese demanded that Tamils should return to India. They denie citizenship to Tamils by enacting the Ceylon Citizenship Act of 1948. This has disentitled them franchise and others rights.

In 1965 Indian Prime Minister Lai Bahadur Shastri and Sri Lankan Prime Minister Mrs. Sirimao Bandaranaike signed an agreement about Tamils citizenship, but in vain. In 1981, agreement between Indira Gandhi and Sirimao Bandaranaike was not implemented due to the Tamil people’s refusal to return to India.