In many Asian countries, the early decades of independence after World War II were marked by tension between ‘indigenous’ political elites and business elites that were in large part alien, or from minority ethnic groups. This tension was one reason for the preference that most governments showed for statist and nationalist economic policies. It has abated in most cases; political and business elites now tend to pursue more co‐operative strategies. Much of the explanation for this lies in changes in the international political economy that made market‐oriented economic policies more attractive to political elites. There are in addition internal political reasons for this rapprochement. These vary from case to case, and have been explored in most detail by scholars in relation to the Southeast Asian countries where Overseas Chinese have dominated larger scale business. This article extends this literature by examining the causes of the gradual rapprochement between ‘majority’ politics and ‘minority’ business in Sri Lanka.