JOIN USIndia says it will support Sri Lanka, mainly through long-term investments
India is likely to help Sri Lanka with long-term investments in its key economic sectors as it already provided the cash-strapped island nation with financial assistance worth almost $4 billion and even surpassed China to be its largest bilateral lender.
The two countries have already started discussion on restructuring Sri Lanka’s debt to India – a prerequisite for it to get a $2.9 billion bailout package from the International Monetary Fund (IMF).
“We continue to be supportive of Sri Lanka in all possible ways, in particular by promoting long term investments from India in key economic sectors in Sri Lanka for its early economic recovery and growth,” the High Commission of India (HCI) in Colombo stated.
India is keen to encourage investments from India in port, energy, electricity, tourism and Information Technology sectors in Sri Lanka. The nation is one of the theaters where India and its strategic rival China compete for geopolitical influence.
India's diplomatic mission in Colombo issued a statement in the wake of reports in a section of the media in Sri Lanka suggesting that India might not extend any further financial assistance to the nation. It, however, did not specifically dismiss the report about India at present not considering any further financial assistance package for Sri Lanka. It rather highlighted the financial assistance India already extended to Sri Lanka to help it come out of the economic crisis.
“We would like to emphasize that India has extended unprecedented bilateral assistance amounting close to $4 billion this year for ameliorating the difficulties faced by the people of Sri Lanka,” the spokesperson of the High Commission stated, adding: “In addition our bilateral development cooperation projects in Sri Lanka, which cumulatively total about US $ 3.5 billion, are ongoing.”
India also sent consignments of food, fuel, medicines, fertilisers and other essentials to Sri Lanka after it plunged into a severe economic crisis earlier this year.
China provided $73 million in aid and rice shipments to help Sri Lanka after the country plunged into an economic crisis early this year. It, however, continued to dilly dally on Sri Lanka’s request for another aid package of at least $4 billion. The country also did not take a call on the Sri Lankan government’s request for amending the terms and conditions of the bilateral $1.5 billion currency swap deal so that the island nation could use it for imports.
“We have also noted the conclusion of a Staff Level Agreement between the IMF and the Government of Sri Lanka. Its further approval within the IMF is contingent upon, inter alia, on Sri Lanka’s debt sustainability. We continue to be supportive of Sri Lanka in all possible ways,” India said.
Though the IMF and the Sri Lankan government recently reached a “staff-level agreement” for a $2.9 billion bailout package for the island nation, it will have to be approved by the lending agency’s management and the Executive Board, after which Colombo will receive financing assurances from the country’s official creditors.
The officials of the two governments recently held the first round of discussions on restructuring Sri Lanka's debt to India.
“The discussions held in a cordial atmosphere symbolise India's support to early conclusion and approval of a suitable IMF programme for Sri Lanka, for which financing assurances from creditors to make Sri Lanka's debt sustainable are required. India will continue to remain closely engaged with relevant Sri Lankan stakeholders,” the High Commission said.