India To Support Sri Lanka In Its Worst Economic Crisis

India has reiterated its willingness to play “a constructive role” in supporting Sri Lanka’s efforts for recovery from the worst economic crisis.

Addressing the inauguration ceremony of the Construction, Power and Energy Expo 2023 in Colombo on Friday, India’s Deputy High Commissioner Vinod K Jacob said that recent developments in India-Sri Lanka ties have strengthened the friendship and all-around cooperation between the two countries.

“We were the first creditor nation in January this year to convey the financing assurances needed to kick start the IMF process. India will continue to play a constructive role as a Co-Chair of the Creditors Committee along with Japan and the Paris Club,” he said.

India in January this year became the first country to hand over its letter of support for financing and debt restructuring of Sri Lanka to the International Monetary Fund (IMF).

In May this year, 17 countries that have extended loans to Sri Lanka formed an official creditor committee’ co-chaired by India, Japan, and France, to discuss Sri Lanka’s request for debt treatment.

The Paris Club is a group of officials from major creditor countries whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by debtor countries.

Jacob said India’s financial and humanitarian support worth USD 4 billion to Sri Lanka is far in excess of the total anticipated Extended Fund Facility of the IMF.

Sri Lanka was hit by a catastrophic financial crisis in 2022, the worst since its independence from Britain in 1948, due to a severe paucity of foreign exchange reserves.

As the country struggled, locked in the throes of the crisis, India extended multi-pronged assistance of about USD 4 billion to it last year, through multiple credit lines and currency support, in line with India’s ‘Neighbourhood First’ policy.

“The past three years have demonstrated the close links between the people of India and Sri Lanka,” Jacob said.

Jacob said the successful visit of External Affairs Minister S Jaishankar to Sri Lanka in January this year opened up avenues for further cooperation through investment in infrastructure, manufacturing and promoting connectivity.

“India was Sri Lanka’s largest trading partner in 2022. Sri Lanka’s exports to India have also grown. The use of Rupees for trade settlement is further helping Sri Lanka’s economy. These are concrete steps to help Sri Lanka’s economic recovery and growth,” he noted.

He noted that India was once again the largest source of tourists for Sri Lanka last year with over 100,000 tourists.

“Around one in every five to six tourists in Sri Lanka is an Indian”.

India extends USD 1 billion credit line to Sri Lanka for another year
He hailed the resumption of Chennai-Jaffna flights as another step in bringing the people of the two countries closer.

“Ferry services between the two countries will bolster this further. Connectivity is a force multiplier in this context,” he added.

-PTI

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