India is not on the side of the Tamils in Sri Lanka, but Tamils are on the side of India. So it seems that in the IV Eelam War, the Tamils were an impediment on the path of New Delhi to achieve its goals: it didn’t want them on its side.
Hence New Delhi backed Rajapaksa up and not the Tamils. The policy of Rajapaksa has been defined by three main poles: to annihilate the LTTE, to increase wealth and to concentrate power and wealth in his own hands.
The military campaign seems instrumental to guarantee a firm support, blinding the Sri Lankan citizens in favor of the increasingly despotic attitudes of the President.
The hunt for deals ranged from Iran (biggest supplier of oil and biggest donor in 2008 with more than $1 billion) to Pakistan (bilateral trade stands at $400 million but is expected to reach $2 billions in a year time), not to mention the Chinese aid: from few millions in 2005, Beijing pledged more than 3.7 billion in loans for infrastructures and related project, but the real figures could be much higher, including the military assistance and undisclosed deals. And Rajapaksa put under tight control this expansion: 70% of the national budget is under direct family control ( source: The Economist ).
The conclusion we can draw from India’s conduct in the IV Eelam War is that New Delhi blesses the business enterprise of Mr. Rajapaksa.