"It is a mistake we must never repeat. If so, we will suffer," he told a forum on global terrorism organised by Shippers’ Academy - Colombo at the Ceylon Chamber of Commerce.
Gunaratna, who heads the university's International Centre for Political Violence and Terrorism Research, said Sri Lanka risks alienating India if the island gets too close to China.
"India punished Sri Lanka then. I have no doubt India will once again punish Sri Lanka if we flirt with China at the cost of India," Gunaratna said.
Sri Lanka could continue to get economic assistance from China but not "at the cost of India," Gunaratna said.
China became Sri Lanka's main supplier of weapons during the ethnic war and is now a key source of aid and investment, helping to build a port and an airport, power plants and roads and railways in the island.
Gunaratna warned that if India sees Sri Lanka as hostile Indian intelligence services could once again train and nurture terrorist groups to destabilise the island as it did in the early 1980s by helping Tamil separatists.
In the initial phases of the ethnic war, Tamil separatists operated out of bases in the south Indian state of Tamil Nadu, using small, fast boats to cross the narrow strip of water separating the two countries for attacks.
That was a time when Sri Lankan political leaders were "very Western oriented" with the island being the first to adopt free market economic policies in the south Asian region, Gunaratna said.
He said Indian support was crucial in the final stages of the war which ended in May 2009 when Sri Lanka came under pressure from Western powers to stop its military campaign on the verge of victory over the Tigers.
"India is the only country which could have stopped the military advance which ultimately defeated the Tamil Tigers," he said, noting that this was made possible by good relations developed by Sri Lanka's government with India.
"If we antagonise India, India will punish us," Gunaratna warned. "India has done it to several other countries."
He referred to how India is seen to have supported violent groups in Pakistan and Bangladesh as well as in Sri Lanka.
What we have to do is learn from the past and prepare to counter the Indian (and the world ) influence.
Firstly we need to establish a good Intelligence Agency. We need to have the capability to foresee what the other powerful countries are up to. What there think tanks are suggesting. No powerful country should be exempted (even the friends).
Since we don't have the enough military muscle to protect our economic and other interests by projecting power when ever the need arise, initially we should consider using the intelligence arm to the maximum. Identify the key people behind the curtain, follow them throughly, learn what type of tactics they use to influence their countries politicians, the main point here is to identify their weak points so when times comes to manipulate them for our own-benefit those identified weaknesses comes vital.
Sometimes elimination of those individuals will benefit. But here terrorism should NOT be an option. (On the other-hand in some cases by helping certain elements of that country to destabilize the normal way of life will serve our purpose)
So to conclude this, our defense establishments should see the very danger living next to a very powerful country and should ready the country for our own survival. (this vision should be expanded to the other countries as well). AND the people living here should clearly understand this problem and should help (press) the authorities to take action.