Traditionally, the identity of indigenous people was defined in relation to closeness to nature and use of wildlife resources. Such an identity has been put under pressure due to development programmes, neo‐liberal policies and increasing market economy, forcing these people to redefine their identity within new socio‐economic and geopolitical contexts. Based on ethnographic research, the situation of the Vedda people in Sri Lanka is analysed. First, we unravel how they define their identity through a ‘meaningful relationship’ with the place in which they used to live prior to their displacement because of a large scale development project. Second, we analyse how the Veddas (re‐)negotiate their identity in a context of limited access to land, lack of education, unemployment, and an increasing demand for indigenous tourism. It is found that the Veddas redefine their identity by pursuing two survival strategies: tourist development and re‐indigenization, and integration into mainstream Sinhalese society. Both strategies pose challenges and opportunities.