India, Sri Lanka hold talks on restructuring debt, boosting private sector investment during COVID-19

During his visit to New Delhi earlier, Sri Lankan Prime Minister Mahinda Rajapaksa sought a loan moratorium from India

July 24, 2020 02:46 pm | Updated 02:46 pm IST - COLOMBO:

India and Sri Lanka recently held a “technical discussion” on rescheduling Colombo’s outstanding debt repayment to India through a video conference. While a final decision is yet to be taken, a follow-up is expected soon, official sources in Colombo said.

The meeting, in which officials from the Ministry of External Affairs, Ministry of Finance, and the EXIM Bank interacted with representatives of the Sri Lankan government, comes five months after Sri Lankan Prime Minister Mahinda Rajapaksa sought a loan moratorium from India, during his visit to New Delhi. Following the outbreak of COVID-19 in the region, India had proposed a virtual meeting to discuss the request. Sri Lanka owes $960 million to India.

Prime Minister Narendra Modi, who spoke to President Gotabaya Rajapaksa and Mr. Mahinda Rajapaksa in May over telephone, had given an assurance that India would continue to provide “all possible support” to Sri Lanka for mitigating the effects of the pandemic.

FICCI webinar

Meanwhile, government and industry representatives from both countries participated in a webinar on ‘Deepening Economic Collaboration between India and Sri Lanka’, organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) in association with the Lakshman Kadirgamar Institute of International Relations and Strategic Studies recently.

Addressing the webinar, Sri Lanka’s Foreign Secretary Ravinatha Aryasinha said the neighbours could explore possible collaborations in textiles, IT and agribusiness sectors that India was “strong in”. India is among the top five foreign investors in Sri Lanka, and accounts for 20 % of total Sri Lankan imports, besides being the third largest export destination for Sri Lanka, he noted.

Assuring that Sri Lanka would “facilitate, protect and promote a liberal ecosystem for Indian investors”, Mr. Aryasinha welcomed Indian businesses in developing industrial zones, automotive components, pharma, textiles and engineering. Speaking on Sri Lanka’s exports, he said that difficulties in market access, often created due to non-tariff barriers in receiving countries, was an impediment, and urged FICCI to collaborate with the Sri Lankan Mission in New Delhi to help boost the export of Sri Lankan spices and concentrates to the Indian market.

Speaking on the occasion, Indian High Commissioner to Sri Lanka Gopal Baglay observed that the current situation called for policies oriented to the future, balancing economic security with the efficient utilisation of complementary economic strengths of the two countries.

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