India plays ‘constructive role’ in supporting Sri Lanka recovery from economic crisis

India has reiterated its willingness to play a ‘constructive role’ in supporting Sri Lanka's efforts for recovery from the worst economic crisis, said India’s Deputy High Commissioner Vinod K Jacob while addressing the inauguration ceremony of the Construction, Power, and Energy Expo 2023 in Colombo on Friday. 

He said that recent developments in India-Sri Lanka ties have strengthened the friendship and all-around cooperation between the two countries, according to the news agency PTI. 

“We were the first creditor nation in January this year to convey the financing assurances needed to kick start the IMF process. India will continue to play a constructive role as a Co-Chair of the Creditors Committee along with Japan and the Paris Club,” he said.

In January this year, India became the first country to have over its letter of support for financing and debt restructuring of Sri Lanka to the Washington-based financial body International Monetary Fund (IMF).

A total of 17 countries that have extended loans to Sri Lanka this May formed an official creditor committee' co-chaired by India, Japan, and France to discuss Sri Lanka's request for debt treatment. 

Jacob said India’s financial and humanitarian support worth USD 4 billion to Sri Lanka is far in excess of the total anticipated Extended Fund Facility of the IMF.

Sri Lanka was hit by a catastrophic financial crisis in 2022, the worst since its independence from Britain in 1948, due to a severe paucity of foreign exchange reserves, PTI reported. 

India extended multi-pronged assistance of about USD 4 billion to it last year, through multiple credit lines and currency support, in line with India’s ‘Neighbourhood First’ policy.

“The past three years have demonstrated the close links between the people of India and Sri Lanka," Jacob said.

He said the successful visit of External Affairs Minister S Jaishankar to Sri Lanka in January this year opened up avenues for further cooperation through investment in infrastructure, manufacturing, and promoting connectivity, as per PTI reports. 

"India was Sri Lanka’s largest trading partner in 2022. Sri Lanka’s exports to India have also grown. The use of Rupees for trade settlement is further helping Sri Lanka’s economy. These are concrete steps to help Sri Lanka’s economic recovery and growth," he noted.

Last year, India was once again the largest source of tourists for Sri Lanka with over 100,000 tourists, he added. 

(With PTI inputs)