Foreign Affairs
India more economic support cooperation in Sri Lanka

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

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

“We were the first lending country to provide the necessary financing assurances to start the IMF process in January this year. India will continue to play a constructive role as co-chair of the Lender Committee with Japan and the Paris Club.” They said.

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

In May this year, 17 countries that owe 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 a coordinated and sustainable solution to payment difficulties experienced by debtor countries.

Jacob said India’s financial and humanitarian assistance of US$ 4 billion to Sri Lanka far exceeds the total anticipated Extended Fund Facility of the IMF.

Sri Lanka could be hit by a devastating financial crisis in 2022 due to a severe shortage of foreign exchange reserves, the worst since independence from Britain in 1948.

When the country was struggling, in the grip of crisis, India provided multi-dimensional assistance of about US$ 4 billion last year through multiple credit lines and currency support, in line with India’s ‘Neighbourhood First’ policy.

“The last three years have demonstrated the close ties 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 has opened avenues for further cooperation through investments in boosting infrastructure, manufacturing and connectivity.

He said, “India was Sri Lanka’s largest trading partner in 2022. Sri Lanka’s exports to India have also increased. The use of the rupee for trade settlement is further helping Sri Lanka’s economy. This will contribute to Sri Lanka’s economic recovery and development.” There are concrete steps to help.” ,

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

“One out of every five to six tourists in Sri Lanka is an Indian”.

He described the resumption of Chennai-Jaffna flights as another step towards bringing the people of the two countries closer.

“The ferry services between the two countries will further boost this. Connectivity is a power multiplier in this context,” he added.

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