This pretext allowed the Dutch to control the island’s richest cinnamon lands. The Dutch ultimately presented the king of Kandy with such a large bill for help against the Portuguese that the king could never hope to repay it. After extensive fighting, the Portuguese surrendered Colombo in 1656 and Jaffna, their last stronghold, in 1658. Superior economic resources and greater naval power enabled the Dutch to dominate the Indian Ocean. They attacked Portuguese positions throughout South Asia and in the end allowed their adversaries to keep only their settlement at Goa.

The king of Kandy soon realized that he had replaced one foe with another and proceeded to incite rebellion in the lowlands where the Dutch held sway. He even attempted to ally the British in Madras in his struggle to oust the Dutch. These efforts ended with a serious rebellion against his rule in 1664. The Dutch profited from this period of instability and extended the territory under their control. They took over the remaining harbors and completely cordoned off Kandy, thereby making the highland kingdom landlocked and preventing it from allying itself with another foreign power. This strategy, combined with a concerted Dutch display of force, subdued the Kandyan kings. Henceforth, Kandy was unable to offer significant resistance except in its internal frontier regions. The Dutch and the Kingdom of Kandy eventually settled down to an uneasy modus vivendi, partly because the Dutch became less aggressive. Despite underlying hostility between Kandy and the Dutch, open warfare between them occurred only once in 1762 when the Dutch, exasperated by Kandy’s provocation of riots in the lowlands, launched a punitive expedition. The expedition met with disaster, but a better planned second expedition in 1765 forced the Kandyans to sign a treaty that gave the Dutch sovereignty over the lowlands. The Dutch, however, maintained their pretension that they administered the territories under their control as agents of the Kandyan ruler.
After taking political control of the island, the Dutch proceeded to monopolize trade. This monopoly was at first limited to cinnamon and elephants but later extended to other goods. Control was vested in the Dutch East India Company, a joint-stock corporation, which had been established for the purpose of carrying out trade with the islands of Indonesia but was later called upon to exercise sovereign responsibilities in many parts of Asia.

The Dutch tried with little success to supplant Roman Catholicism with Protestantism. They rewarded native conversion to the Dutch Reformed Church with promises of upward mobility, but Catholicism was too deeply rooted. (In the 1980s, the majority of Sri Lankan Christians remained Roman Catholics.) The Dutch were far more tolerant of the indigenous religions than the Portuguese; they prohibited open Buddhist and Hindu religious observance in urban areas, but did not interfere with these practices in rural areas. The Dutch banned Roman Catholic practices, however. They regarded Portuguese power and Catholicism as mutually interdependent and strove to safeguard against the reemergence of the former by persecuting the latter. They harassed Catholics and constructed Protestant chapels on confiscated church property.

The Dutch contributed significantly to the evolution of the judicial, and, to a lesser extent, administrative systems on the island. They codified indigenous law and customs that did not conflict directly with Dutch-Roman jurisprudence. The outstanding example was Dutch codification of the Tamil legal code of Jaffna- -the Thesavalamai. To a small degree, the Dutch altered the traditional land grant and tenure system, but they usually followed the Portuguese pattern of minimal interference with indigenous social and cultural institutions. The provincial governors of the territories of Jaffnapatam, Colombo, and Trincomalee were Dutch. These rulers also supervised various local officials, most of whom were the traditional mudaliyar (headmen).

The Dutch, like the Portuguese before them, tried to entice their fellow countrymen to settle in Sri Lanka, but attempts to lure members of the upper class, especially women, were not very successful. Lower-ranking military recruits, however, responded to the incentive of free land, and their marriages to local women added another group to the island’s already small but established population of Eurasians–the Portuguese Burghers. The Dutch Burghers formed a separate and privileged ethnic group on the island in the twentieth century.
During the Dutch period, social differences between lowland and highland Sinhalese hardened, forming two culturally and politically distinct groups. Western customs and laws increasingly influenced the lowland Sinhalese, who generally enjoyed a higher standard of living and greater literacy. Despite their relative economic and political decline, the highland Sinhalese were nonetheless proud to have retained their political independence from the Europeans and thus considered themselves superior to the lowland Sinhalese.

The Kandyans’ search for foreign assistance against the Dutch was a mistake because they simply replaced a relatively weak master with a powerful one. Britain was emerging as the unchallenged leader in the new age of the Industrial Revolution, a time of technological invention, economic innovations, and imperialist expansion. The nations that had launched the first phase of European imperialism in Asia–the Portuguese and the Dutch–had already exhausted themselves.
While peace negotiations were under way in Europe in 1796, the British assumed Sri Lanka would eventually be restored to the Dutch. By 1797 however, London had decided to retain the island as a British possession. The government compelled the British East India Company to share in the administration of the island and guaranteed the company a monopoly of trade, especially the moderately profitable–but no longer robust–cinnamon trade. The governor of the island was responsible for law and order, but financial and commercial matters were under the control of the director of the East India Company. This system of “dual control” lasted from 1798 to 1802. After the Dutch formally ceded the island to the British in the 1801 Peace of Amiens, Sri Lanka became Britain’s first crown colony.
Kandyan headmen and the British signed a treaty known as the Kandyan Convention in March 1815. The treaty decreed that the Kandyan provinces be brought under British sovereignty. In general, the old system was allowed to continue, but its future was bleak because of the great incongruity between the principles on which the British administration was based and the principles of the Kandyan hierarchy. Troubled by the corresponding decline in their status, the monks began to stir up political and religious discontent among the Kandyans almost immediately following the British annexation. The popular and widespread rebellion that followed was suppressed with great severity. When hostilities ended in 1818, the British issued a proclamation that brought the Kandyan provinces under closer control. With the final British consolidation over Kandy, the country fell under the control of a single power–for the first time since the twelfth-century rule of Parakramabahu I and Nissankamalla.
When the British first conquered the maritime provinces of Sri Lanka, the indigenous population of the island was estimated at only 800,000. When the British left a century and a half later, the population had grown to more than 7 million. Over a relatively short period, the island had developed an economy capable of supporting the burgeoning population. Roads, railways, schools, hospitals, hydroelectric projects, and large well operated agricultural plantations provided the infrastructure for a viable national economy.
In the mid-1830s, the British began to experiment with a variety of plantation crops in Sri Lanka, using many of the technological innovations developed earlier from their experience in Jamaica. Within fifteen years, one of these crops, coffee, became so successful that it transformed the island’s economy from reliance upon subsistence crops to plantation agriculture. Tea replaced coffee in later years.
In Sri Lanka as in India, the British created an educated class to provide administrative and professional services in the colony. By the late nineteenth century, most members of this emerging class were associated directly or indirectly with the government. Increased Sri Lankan participation in government affairs demanded the creation of a legal profession; the need for state health services required a corps of medical professionals; and the spread of education provided an impetus to develop the teaching profession. In addition, the expansion of commercial plantations created a legion of new trades and occupations: landowners, planters, transport agents, contractors, and businessmen. Certain Sinhalese caste groups, such as the Karava and Salagama, benefited from the emerging new economic order, to the detriment of the traditional ruling cultivators (Goyigama).
The development of a capitalist economy forced the traditional elite–the chiefs and headmen among the low-country Sinhalese and the Kandyan aristocracy–to compete with new groups for the favors of the British. These upwardly mobile, primarily urban, professionals formed a new class that transcended divisions of race and caste

The assassination of Jaffna Mayor Alfred Duraiyappah in 1975 marked a crisis point.
The Government of J. R. Jayawardene swept to power in 1977, defeating the largely unpopular United Front government. Jayawardene introduced a new constitution, together with a free market economy and a powerful executive presidency modelled after that of France. It made Sri Lanka the first South Asian country to liberalize its economy. Beginning in 1983, ethnic tensions were manifested in an on-and-off insurgency against the government by the Liberation Tigers of Tamil Eelam (LTTE). Following the riots in July 1983, more than 150,000 Tamil civilians fled the island, seeking asylum in other countries. Lapses in foreign policy resulted in strengthening the Tigers by providing arms and training. In 1987, the Indo-Sri Lanka Accord was signed and the Indian Peace Keeping Force (IPKF) was deployed in northern Sri Lanka to stabilize the region by neutralizing the LTTE. The same year, the JVP launched its second insurrection in Southern Sri Lanka, necessitating redeployment of the IPKF in 1990. In 2002, the Sri Lankan government and LTTE signed a Norwegian-mediated ceasefire agreement.
The Tamil Tigers bomb the sacred Sri Dalada Maligawa temple resulting in 17 deaths.
The 2004 Asian tsunami killed over 35,000 in Sri Lanka. From 1985 to 2006, Sri Lankan government and Tamil insurgents held four rounds of peace talks without success. Both LTTE and the government resumed fighting in 2006, and the government officially backed out of the ceasefire in 2008. In 2009, under the Presidency of Mahinda Rajapaksa the Sri Lanka Armed Forces defeated the LTTE, and re-established control of the entire country by the Sri Lankan Government. Overall, between 60,000 and 100,000 people were killed during the 26 years of conflict.
40,000 Tamil civilians may have been killed in the final phases of the Sri Lankan civil war, according to an Expert Panel convened by U.N. Secretary General Ban Ki-moon. The exact number of Tamils killed is still a speculation that needs further study. Following the LTTE’s defeat, the Tamil National Alliance, the largest Tamil political party in Sri Lanka, dropped its demand for a separate state in favor of a federal solution. The final stages of the war left some 294,000 people displaced. According to the Ministry of Resettlement, most of the displaced persons had been released or returned to their places of origin, leaving only 6,651 in the camps as of December 2011. In May 2010, President Rajapaksa appointed the Lessons Learnt and Reconciliation Commission (LLRC) to assess the conflict between the time of the ceasefire agreement in 2002 and the defeat of the LTTE in 2009.Sri Lanka has emerged from its 26-year war to become one of the fastest growing economies of the world.

However the fighting continued for a couple of days thereafter. On the same day, Sri Lankan troops killed 70 rebels attempting to escape by boat, as the last LTTE strongpoints crumbled. The whereabouts of LTTE leader Vellupillai Prabhakaran and other major rebel leaders were not certain at the time. On 17 May 2009, Selvarasa Pathmanathan, the LTTE chief of international relations, admit the organization’s defeat stating “This battle has reached its bitter end … We have decided to silence our guns. Our only regrets are for the lives lost and that we could not hold out for longer”.
On May 18, 2009 Velupillai Prabhakaran was erroneously claimed to be killed by the Sri Lankan armed forces. It was claimed that on the morning of that day, he was killed by gunfire, while trying to escape the conflict zone in an ambulance with his closest aides. State television announced that the military had surrounded Prabhakaran in a tiny patch of jungle in the north-east. The Daily Telegraph wrote that, according to Sri Lankan TV, Prabhakaran was “… killed in a rocket-propelled grenade attack as he tried to escape the war zone in an Ambulance. Colonel Soosai, the leader of his “Sea Tigers” navy, and Pottu Amman, his intelligence chief were also killed in the attack.” 19 May 2009 saw President Mahinda Rajapaksa giving a victory speech to the Parliament and declared that Sri Lanka is liberated from terrorism. Around 9:30 a.m., the same day, troops attached to Task Force VIII of Sri Lanka Army, reported to its commander, Colonel G.V. Ravipriya that a body similar to Velupillai Prabhakaran has been found among the mangroves in Nandikadal lagoon.
Former Commander of the Army Sarath Fonseka officially announced Prabhakaran’s death on the State television ITN. Later, his body was shown on Swarnavahini for the first time, while the identity was confirmed by Karuna Amman, his former confidant. DNA tests against his son, who had been killed earlier by the Sri Lanka Military, also confirmed the death.Prabakaran’s identity was however, contradicting the government claims, Selvarasa Pathmanathan on the same day claimed that “Our beloved leader is alive and safe.” But finally on the 24 May 2009, he admitted the death of Prabhakaran, retracting the previous statement.The Sri Lankan military effectively concluded its 26 year operation against the LTTE, its military forces recaptured all remaining LTTE controlled territories in the Northern Province.
The Sri Lankan civil war cost the lives of an estimated 80,000–100,000 people. This included more than 23,327 Sri Lankan soldiers and policemen, 1,155 Indian soldiers and 27,639 Tamil fighters. The numbers were confirmed by Secretary of Defence Ministry Gotabhaya Rajapaksa in an interview with state television on 22 May 2009. 23,790 Sri Lankan military personnel were killed since 1981 (it was not specified if police or other non-armed forces personnel were included in this particular figure). From the August 2006 recapture of the Mavil Aru reservoir until the formal declaration of the cessation of hostilities (on May 18), 6261 Sri Lankan soldiers were killed and 29,551 were wounded. The Sri Lankan military estimates that up to 22,000 LTTE militants were killed in the last three years of the conflict.While Gotabhaya Rajapaksa confirmed that 6,261 personnel of the Sri Lankan Armed Forces had lost their lives and 29,551 were wounded during the Eelam War IV since July 2006. Brigadier Udaya Nanayakkara added that approximately 22,000 LTTE fighters had died during this time.
Following the LTTE’s defeat, Tamil National Alliance, the largest political party in Sri Lanka dropped its demand for a separate state, in favour of a federal solution. Sri Lanka, emerging after a 26-year war, has become one of the fastest growing economies of the world.
Presidential elections were completed in January 2010. Mahinda Rajapaksa won the elections with 59% of the votes, defeating General Sarath Fonseka who was the united opposition candidate.
Under Mahinda Rajapaksa large infrastructure projects and Mega projects such as the Magampura Mahinda Rajapaksa Port were carried out. Large hydro power projects as well as coal powered power plants like the Sampur and Norocholai Power Stations and Sustainable power stations such as the Hambantota Solar Power Station were also built to supply the rising need for power in the country. By 2010 Sri Lanka’s poverty rate was 8.9% while it was 15.2% in 2006.Sri Lanka also made it into the “high” category of the Human Development Index during this time.
However the government came under fierce criticism for corruption and Sri Lanka ranked 79 from among 174 countries in the Transparency International corruption index.
In 2014 November Mahinda Rajapksa called for early elections as signs of declining public support started to appear. Taking the chance the General Secretary of the ruling Sri Lanka Freedom Party and Health minister Maithripala Sirisena defected and said he would contest President Mahinda Rajapaksa at the upcoming presidential election. He was backed by the former president Chandrika Kumaratunga, UNP and its leader Ranil Wickremesinghe, Jathika Hela Urumaya as well as Sarath Fonseka. In his speech he promised to end Thuggery, embezzlement, crime, drug mafia, nepotism and corruption. The largest Muslim party of Sri Lanka also left the government and joined Maithripala.
In Sri Lankan presidential election, 2015 in January Maithripala won the election with 51.28% of the votes and took oath as president.