This bachelor thesis is based upon two-and-a-half month field research on the tea plantations in Sri Lanka. Ethnic identity formation is a hot topic for the plantation community. In this thesis we focused on the tensions between the insider’s perspective (emic) as well as the outsider’s perspective (etic) on identity formation. Both perspectives were researched through the eyes of the plantation community itself. Etic and emic perceptions are extremely interwoven. Identity formation is a complex process because it is a real tug of war between all social powers. Many social powers influence the process of ethnic identity formation. In our research we mentioned social powers like the government, Sinhalese community, Muslim community, Sri Lankan Tamils, religion, caste, language and work. Every individual attaches different values to different social powers. It is an ongoing and complex process.