(MENAFN- Trend News Agency)
After helping Sri Lanka with an unprecedented assistance of
around $4 billion since January as the country plunged into a deep
economic crisis, India is now planning to invest heavily in newer
sectors through both private and public firms there, Gopal Baglay,
high commissioner of India to Sri Lanka, told ThePrint in an
interview, Trend reports.
The sectors India will focus on include renewable energy,
hydrocarbons, ports and infrastructure, and IT among others. Both
countries are also looking at signing the long pending Economic and
Technology Co-operation Agreement.
The top Indian diplomat in Colombo said New Delhi will now work
with the new government there, both at the functional as well as
political levels, to facilitate talks for a bailout package by the
International Monetary Fund (IMF) for Sri Lanka, which got stuck
earlier as the situation there worsened.
The island nation has been reeling under a massive crisis
following over 100 days of protests by its people, witnessing a
change of regime with the ousting of former president Gotabaya
Rajapaksa, who eventually fled the country. Subsequently, Ranil
Wickremesinghe was elected as president and Dinesh Gunawardena as
prime minister.
“Sri Lanka is an economy having three main sources of revenue —
exports, tourism and remittances. Due to Covid, some of these
sources dried up completely. Sri Lanka is now trying to come back
to normal levels of functioning and the economy will benefit from
more investments. As a result, we are now looking at bringing in
more investments in this country,” Baglay told ThePrint.
“We will engage with the new Sri Lankan government on this for
promoting greater trade, greater investment and more cooperation
between the two economies,” he added.
Since January this year, India has offered aid and humanitarian
assistance to the tune of around $4 billion to Sri Lanka, the
largest ever given to any country, to help the island nation meet
its shortage of food, fuel, medicines and other essential
items.
Investment in newer sectors
According to Baglay, discussions with the new government there
have already begun regarding which sectors the investments will be
coming in.
He said Indian investors, from the public as well as private
sectors, will explore opportunities in certain key sectors of ports
and infrastructure, renewable energy, electricity, hydrocarbons,
agriculture and dairy, education and information technology, among
others.
“Basically those areas where India has its own strength…And we
being in the neighbourhood are in a better position to create wider
ties in these areas. It is already happening as we speak,” he said,
adding that a team from NTPC Ltd (National Thermal Power
Corporation Limited) had visited Sri Lanka earlier this month.
The NTPC is looking at establishing a solar power plant in
Sampur in eastern Sri Lanka near Trincomalee, under a joint
collaboration with the Ceylon Electricity Board (CEB).
“Even in this situation, which obviously has its own
difficulties, we continue to work with the Sri Lankan government to
push forward, as best as one can, joint ventures and joint
projects. At the same time, we are also in discussion with the new
government to create more avenues for newer investments from
India,” Baglay highlighted.
He said that apart from renewable energy and IT, the focus now
will also be on the manufacturing of pharmaceutical products.
“Sri Lanka presently imports pharmaceuticals, 70 per cent of
which actually comes from India. So, the idea is if Sri Lanka can
not only start producing pharmaceutical products for its own
requirements but eventually also export them to earn forex,” added
Baglay.
Similarly, the high commissioner said, Sri Lanka has huge
potential in solar and wind energy, thus that can also be exported
to India after meeting its own requirements.
“So it will create another source of revenue…Sri Lanka sees
benefits in this issue. In the current situation, Sri Lanka has
seen the benefits of a closer economic partnership with India. They
have also benefitted from a large economy like ours and a large and
diversified market,” he added.
India to assist Sri Lanka on IMF package
As Sri Lanka anxiously awaits for the IMF to design and offer a
bailout package to help stabilise its teetering economy, the
multilateral lending institution is acting tough as the country
continues to remain chaotic while lack of clarity on Chinese debt
data continues to pose a challenge.
“India takes care of Sri Lanka's interests in the IMF as both
are members…We've come forward in the talks whenever we have been
asked to help. But their negotiations with the IMF are their
negotiations as a sovereign government. But we have facilitated the
process and facilitated the sentiment in the international
community in supporting Sri Lanka at this juncture,” Baglay
underlined.
He said India has“made a strong case” for Sri Lanka in
bilateral talks also with the US, Japan and Australia for coming
forward to help the country.
Earlier this month, IMF Managing Director Kristalina Georgieva
had called the crisis in Sri Lanka a“warning sign” for countries
which have high levels of debt but constrained policy space.
A high-level IMF delegation had undertaken a visit to Sri Lanka
end-June, but the talks for a comprehensive package remained
inconclusive.
Conclusion of ETCA 'beyond' FTA
Apart from investments, Baglay said both sides are now also
working towards expediting the conclusion of the pending Economic
and Technology Co-operation Agreement (ETCA), which will“go
beyond” the existing India-Sri Lanka free trade agreement that came
into force in March 2000.
“ETCA is something which goes beyond the FTA because it also
brings in several other aspects. Technology is the key driver
here,” he added.
The ETCA was initially slated to be signed in 2016 when
President Wickremesignhe was the prime minister of Sri Lanka. It is
expected to address larger issues of market access and asymmetry in
two-way trade.
Sri Lanka is also carrying out a unique ID project for its
citizens under a grant assistance from India. This is based on
India's Aadhar model.
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