India on Thursday assured Sri Lanka of its “fullest support” to help the island tide over its unprecedented economic crisis while “considering further financial assistance”, the Sri Lankan President’s office said.
A delegation from New Delhi led by Foreign Secretary Vinay Kwatra, and including Secretary, Department of Economic Affairs Ajay Seth, Chief Economic Advisor V. Anantha Nageswaran and Joint Secretary to the Indian Ocean Region Division at the Ministry of External Affairs Kartik Pande, visited Colombo on Thursday.
During the visit, spanning barely half a day, the Indian officials met President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe, and held discussions on New Delhi’s ongoing assistance, of over $ 3.5 billion since January 2022, to the island nation. Indian assistance so far has been extended by way of currency swaps, loan deferments and credit lines for essential imports.
IMF talks
Colombo has sought a further $ 500 million from New Delhi, to import fuel and is awaiting a response, Prime Minister Ranil Wickremesinghe recently told The Hindu in an interview. The Sri Lankan government is currently holding talks with a visiting delegation of the International Monetary Fund, on a debt restructure programme, but is also urgently looking for bridging finance to cope with the acute shortages of essentials that have left citizens struggling.
“Sri Lanka has already received essential food items, fuel, medicine, and fertilizer under the Indian credit line facility… The Indian delegation stated that the Government of India and the political authorities are committed to provide continued support to Sri Lanka,” President Gotabaya’s office said in a statement.
“Both parties discussed on the future course of action of the Indian aid programme to stabilize and revive the Sri Lankan economy, at length,” it further said, adding that the Indian delegation arrived in the island “to consider further financial assistance” to Sri Lanka. A statement from the Indian High Commission said: “Both sides highlighted the importance of promoting India-Sri Lanka investment partnership including in the fields of infrastructure, connectivity, renewable energy, and deepening economic linkages between the two countries.”
External Affairs Minister S. Jaishankar, who’s in Rwanda to attend the Commonwealth Summit, met his Sri Lankan counterpart G.L. Peiris. “Talked about Commonwealth issues as well as India’s support for Sri Lanka at this time,” Mr. Jaishankar tweeted about the meeting.
From the beginning of this year, India has signed key bilateral agreements with Sri Lanka, to jointly develop the Trincomalee Oil Tank Farm and set up (through the National Thermal Power Corporation) a solar power plant in Sampur. Both are located in the Eastern Province. In the renewable energy sector, India’s Adani Group signed an agreement to execute projects in Mannar and Pooneryn in the Northern Province, sparking a controversy over its entry into the island’s energy sector, outside of any known competitive bidding process. Colombo has defended the $ 500 million deal.
Enhanced connectivity between the neighbours has also come under sharp focus. Earlier this week, Aviation Minister Nimal Siripala de Silva said Sri Lanka will resume flights from the northern Jaffna peninsula to India next month, in a move that Colombo hopes would support the country’s tourism sector, and help reviving the island’s crisis-hit economy.
