Foreign exchange reserves empty; Sri Lanka in economic collapse; India, Malayalam News, india srilanka, international relations, jaffna, Sri Lanka Financial crisis

New Delhi: India has extended a helping hand to Sri Lanka, which is facing a severe financial crisis. India is preparing to sign a $ 1 billion emergency aid package for Sri Lanka for food and essentials. Sri Lankan Finance Minister Basil Rajapaksa on Wednesday called on Prime Minister Narendra Modi.

India’s assistance is a relief to Sri Lanka, which is struggling with famine and inflation. The financial crisis in Sri Lanka has been exacerbated by the introduction of Kovid controls in 2020. The financial crisis in Sri Lanka has intensified with the depletion of foreign exchange reserves. As the energy crisis escalated, people took to the streets in Sri Lanka. Meanwhile, Sri Lankan Finance Minister Basil Rajapaksa visited India to seek help.

Rajapaksa, who arrived in Delhi on Wednesday for a three-day visit, met Prime Minister Narendra Modi, External Affairs Minister S Jayasankar and Finance Minister Nirmala Sitharaman and reached a final decision on the credit line.

With this assistance, India aims to persuade Sri Lanka to finalize previous proposals for the joint development of Palaly Airport and Kankesanthurai Port. Both are located on the Jaffna Peninsula off the coast of Tamil Nadu.

The Sri Lankan High Commission said that Modi and Rajapaksa discussed “broad bilateral issues” as well as issues related to the energy sector in addition to tourism and fisheries. The Indian Ministry of External Affairs also thanked Rajapaksa and Narendra Modi for India’s support to the Sri Lankan economy.

Since Rajapaksa’s visit to India in December 2020, India has so far provided $ 1.4 billion in aid to Sri Lanka. India provided $ 500 million in debt, $ 400 million in currency swaps and $ 500 million in loan defaults to the Asian Clearing Union.

Although India has not set any conditions for assistance, Sri Lanka has recently given the green signal to a number of Indian projects as the IMF has begun providing assistance in response to India’s intervention. It is also noteworthy that India is interested in implementing the 13th Amendment to the Constitution of Sri Lanka regarding the political partition of the Tamil-dominated North and East.

According to the Indian Express, an official said that India was pressuring Sri Lanka to expedite the completion of two ‘connectivity’ projects in Palaly and Kankesanthurai. It is reported that both these projects will help revive the tourism industry in Sri Lanka.

Both sides are considering resuming a ferry service between Thalaimannar in north-western Sri Lanka and Rameshwaram in Tamil Nadu.

Content Highlights: india to sign off one billion dollar credit line to srilanka eyeing harbour and airport projects