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Tuesday May 17th, 2022
Economy

India reaffirm assistance to Sri Lanka at high level virtual meeting

Indian External Affairs Minister Subrahmanyam Jaishankar

ECONOMYNEXT – India reaffirmed its assistance to Sri Lanka at a high level virtual meeting between Indian External Affairs Minister S Jaishankar and Sri Lankan Finance Minister Basil Rajapaksa on Saturday (15).

The virtual meeting comes six days after Chinese Foreign Minister Wang Yi’s official visit to Colombo where Sri Lanka leader Gotabaya Rajapaksa made an appeal for debt restructuring. China has agreed to help in this regard, according to Sri Lankan officials.

“Just concluded a detailed virtual meeting with Sri Lankan Finance Minister Basil Rajapaksa. Reaffirmed that India will be a steadfast and reliable partner of Sri Lanka,” Jaishankar tweeted Saturday afternoon.

 

“Assured that India will take up with other international partners initiatives to support Sri Lanka at this important juncture. Welcomed the progress on Trincomalee Tank Farm which will contribute to energy security.

“Considered projects and investment plans by India that would strengthen the Sri Lankan economy. Urged early release of Indian fishermen in Sri Lankan custody as a humanitarian gesture.”

The Ministry of External Affairs in India in a separate statement said Jaishankar has conveyed that India will continue to support Sri Lanka in all possible ways for overcoming economic and other challenges posed by the COVID-19 pandemic.

“As close friends and maritime neighbours, both India and Sri Lanka stand to gain from closer economic interlinkages,” the Minsitery said in its statement.

“Both Ministers positively noted that extension of 400 million US dollars to Sri Lanka under the SAARC currency swap arrangement and deferral of ACU settlement of 515.2 million US dollars by two months, which would assist Sri Lanka.

“The two Ministers reviewed the progress in extending the Indian credit facility of USD 1 billion for importing food, essential items and medicine and USD 500 mn for importing fuel from India.

“Mr Rajapaksa recalled India’s long standing cooperation with Sri Lanka and deeply appreciated the gestures of support. He welcomed Indian investments in Sri Lanka in a number of important spheres including ports, infrastructure, energy, renewable energy, power and manufacturing and assured that a conducive environment will be provided to encourage such investments.”

“In this context, both ministers noted that the recent steps taken by the Government of Sri Lanka for jointly modernizing Trincomalee Oil Tank Farms will boost confidence of investors, apart from enhancing Sri Lanka’s energy security.”

Since Prime Minister Mahinda Rajapaksa unilaterally canceled a 500 million US dollar East Container Terminal (ECT) in February last year, India has taken a major move to aggressively patch up its severed diplomatic ties with Sri Lanka.

India this week deferred a 500 million US dollar payment settlement for the Asian Clearing Union that Sri Lanka owes this month and pledged 400 million US dollars via a swap arrangement with the Reserve Bank of India. This development came a week after Sri Lanka signed an oil deal on the Trincomalee oil tank farm that has been in stagnant for decades.

Analysts say India’s active diplomatic patch up with financial assistance come in the wake of increasing investments and lending by China in various projects which have made India nervous over concerns of Beijing increasing its influence in Sri Lanka including the country’s north which is just 50 killometres from South India.

India has repeatedly raised concerns over increasing Chinese presence in Sri Lanka due to possible risks to the Indian Ocean region’s security, government sources have told EconomyNext.

However, China has said all its dealing with Sri Lanka are commercial in nature and has nothing to do with the military. (Colombo/Jan15/2022)

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