edited by: Shankhneel Sarkar
Last Update: January 20, 2023, 12:24 pm IST
Sri Lankan Foreign Minister Ali Sabri thanked the Prime Minister during his bilateral meeting with Union External Affairs Minister S Jaishankar Narendra Modi And his administration has extended a helping hand amid the ongoing financial crisis.
“It is no exaggeration to say that because of the overwhelming support India With a line of credit amounting to US$4 billion for the import of essential goods, we were able to achieve some measure of financial stability. I express my deep gratitude to PM Modi,” Sabri was quoted as saying.
Union Minister Jaishankar, who is currently in Colombo, said that India stands in solidarity with its neighbor Sri Lanka in this difficult time. Jaishankar will also meet Sri Lankan President Ranil Wickremesinghe and other ministers.
“Conveyed our commitment to increase investment flows to accelerate economic recovery in Sri Lanka. Look forward to my discussion with leadership tomorrow morning.
India has been active in helping Sri Lanka amid the economic crisis. Sri Lanka’s financial crisis has been ongoing for more than a year and led to the collapse of the Rajapaksa-led government last year, prompting Gotabaya Rajapaksa to flee the country and return months later.
India told the International Monetary Fund (IMF) earlier this week that it strongly supports Sri Lanka’s debt restructuring plan. reuters, Sri Lanka has sought a $2.9 billion loan from the global lender.
Sri Lanka will need the support of India and China to reach a final agreement with the IMF. The Sri Lankan government said it was confident of finalizing the support from the IMF in the first quarter of 2023.
Between January and July last year, India provided $4 billion in quick aid to Sri Lanka through lines of credit, currency swap arrangements and deferred import payments. It owes $7.4 billion to Chinese lenders. Under the restructuring plan, Sri Lanka will pay India about $1 billion, reuters said citing people familiar with the development.
During the financial crisis, India also stepped in to help Sri Lankan farmers by handing over 21,000 tonnes of fertiliser. In July, the External Affairs Minister told the Lok Sabha that India extended eight Lines of Credit (LOCs) worth $1850.64 million to Sri Lanka in the last ten years.
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