(MENAFN- Colombo Gazette)
India extend its assistance to Sri Lanka without waiting on others
During a recent visit by the Indian External Affairs Minister Dr. Jai Shankar to Sri Lanka, Foreign Minister Ali Sabri expressed his deep appreciation and gratitude to India on behalf of President Ranil Wickremesinghe and the government and people of Sri Lanka, for assisting Sri Lanka during its financial crisis.
Sabri thanked India for its enormous support, including a credit line worth over US$4 billion for the import of essential goods and other in-kind humanitarian assistance, which he said was critical in helping Sri Lanka regain some measure of economic and financial stability.
“For this, on behalf of President Ranil Wickremesinghe and the Government and people of Sri Lanka, I convey our profound gratitude to Prime Minister Narendra Modi, the Indian Government, to you Dr. Jai Shankar, and the people of India,” Sabri said.
The Indian External Affairs Minister Dr. Jai Shankar welcomed the expression of gratitude and thanked Sri Lanka for its warm hospitality during his visit. He expressed India's commitment to continue its partnership with Sri Lanka in all areas of mutual interest and strengthen the longstanding ties between the two countries.
The visit by the Indian External Affairs Minister Dr. Jai Shankar was seen as an important step in further strengthening the bilateral ties between India and Sri Lanka, particularly in the areas of trade, investment, and security cooperation.
Addressing a press briefing during his visit to Colombo Dr. Jaishankar reiterated India's commitment to the“neighborhood first” policy and emphasized the importance of not leaving a partner to fend for themselves. Jaishankar acknowledged that in the past year, there had been a developing situation that was causing concern, and it was crucial for Sri Lanka's creditors to take proactive steps to facilitate its recovery.
“We felt strongly that Sri Lanka's creditors must take proactive steps to facilitate its recovery. India decided not to wait on others but to do what it believes is right in its support for Sri Lanka. India is prepared to be a reliable partner on such initiatives,” Jaishankar said.
Jaishankar's comments reflect how India continues to stand by its neighbours amid difficult times. His remarks particularly hold more importance as Sri Lanka faces an unprecedented political and economic crisis.
As a concrete example of India's commitment, Jaishankar announced that both countries had agreed in principle on a renewable energy framework that would take this cooperation forward. This initiative is expected to bring immense benefits to Sri Lanka, as India is one of the world's largest producers of renewable energy.
The renewable energy framework is just one of the many areas in which India and Sri Lanka are collaborating to strengthen their bilateral ties. Trade, investment, and security cooperation are also among the areas of mutual interest where the two countries are working closely together.
Jaishankar's visit to Sri Lanka was seen as an important step in reaffirming the strong and longstanding ties between the two countries.
India became the first country to hand-over its letter of support for financing and debt restructuring of Sri Lanka to the International Monetary Fund in a sign of its continued support for the island nation's economic recovery. In 2022, India provided $4.5 billion in assistance to Colombo to tide over its dire economic situation.
New Delhi handed over its support letter to IMF on January 16, four days before External Affairs Minister S Jaishankar landed in Colombo to meet Sri Lanka's political leadership on January 20. During his meetings with Sri Lankan leaders including President Ranil Wickremesinghe, Jaishankar made it clear that India stands with its neighbour at a time of need and is prepared to go the extra mile if the need arises.
In the letter of support to IMF, addressed to IMF Managing Director Ms. Kristalina Georgieva, India's finance ministry acknowledged Sri Lanka's deeply unsustainable debt situation, the country's engagement with creditors to restore debt sustainability, and confirmed its strong support to Colombo's prospective extended finance facility supported program. New Delhi has made it clear that it is committed to supporting Sri Lanka with financing/debt relief consistent with restoring that country's public debt sustainability under the IMF supported program and ensuring that the program is fully financed as projected by the Bretton Woods Institution. The Modi government has conveyed that this financing/debt relief will be provided by the Export Import Bank of India.
India has taken the lead in supporting Colombo's recovery. India has conveyed its commitment to continuing negotiations with the Sri Lankan government and the Paris Club on a medium- to long-term debt restructuring through maturity extension and interest rate reduction or other financial instruments that can provide similar debt relief.
The financing-cum-debt relief provided by EXIM Bank of India will be consistent with restoring debt sustainability under the IMF supported program. The Modi government has been informed that the IMF's debt sustainability assessment will be based on program targets such as reducing the ratio of Sri Lankan public debt to GDP to below 95% by 2032 (from 130% in 2022), the central government's annual gross financing needs below 13% of GDP on average in the 2027-2032 period, and the Sri Lankan government's annual foreign currency debt service below 4.5% of GDP in every year during the above time frame. Additionally, the target is to close the external financing gap of the island nation.
The relationship between India and Sri Lanka is deep-rooted and based on a shared history and civilization. The two countries have common cultural, religious, and social ties, and have been linked economically and in terms of security concerns.
Historically, India and Sri Lanka have had close cultural and religious connections while Buddhism and Hinduism have been significant religious influences in both countries. Additionally, India has been a significant source of trade, migration, and cultural exchange with Sri Lanka throughout history.
In the modern era, India and Sri Lanka continue to have close economic and security ties. India is one of Sri Lanka's largest trading partners, and the two countries have signed several bilateral agreements to enhance trade and investment between them. India has also provided financial and technical assistance to Sri Lanka in various sectors, including infrastructure, energy, and agriculture.
In terms of security concerns, India and Sri Lanka have cooperated closely on issues such as counter-terrorism, maritime security, and intelligence sharing. India has also provided military and technical assistance to Sri Lanka during its internal conflicts.