India to be Sri Lanka's key partner as Colombo looks at economic growth

New Delhi also provided guarantees to the International Monetary Fund (IMF) to help the country secure a USD 2.9 billion bailout package

Press Trust of India New Delhi
Sri Lanka Flag (Photo: Wikipedia)

Sri Lanka Flag (Photo: Wikipedia)

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India was Sri Lanka's main partner in helping it deal with the economic crisis last year and the country will remain a key ally as Colombo looks at a growth path, island nation's envoy Milinda Moragoda said on Tuesday.

On China's attempts to expand influence over Colombo, Moragoda said India-Sri Lanka relationship is too important to be measured in the context of a third country.

"We have to get back to the growth path. Growth is the key aspect. For that, India becomes a key partner. India was our main partner last year in helping stabilisation of our economy with different instruments," he said.

"For the revival of the economy too, India will be an important partner. We have to diversify our sources of income when it comes to exports and foreign exchange earnings," the envoy said.

Moragoda made the remarks during a media interaction at the Foreign Correspondents' Club Of South Asia here.

India extended financial assistance worth around USD 4 billion to Sri Lanka, including lines of credit, for purchases of food and fuel last year when it was reeling under a severe economic crisis.

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New Delhi also provided guarantees to the International Monetary Fund (IMF) to help the country secure a USD 2.9 billion bailout package.

The envoy listed boosting connectivity between the two countries, increasing flow of Indian tourists to the island nation and integration of the Sri Lankan economy with that of India as possible steps that would support Colombo's efforts to spur growth.

"We are in the process of restructuring our debt. We have to do a lot of structural reform to our economy," he said.

The envoy also suggested that the process to roll out India's RuPay card in Sri Lanka is being taken forward.

He also indicated to have an "Indian-rupee trade" as part of efforts for the country's economic recovery.

Asked about Adani Group's West container terminal project at the Colombo port, he said it is on course.

"It is a very important investment for us and it gives us confidence that someone is willing to invest in Sri Lanka during a time like this," he said.

Moragoda also said that negotiations for a power purchase agreement between the two countries are being finalised. "We are also hoping to soon sign an MoU with India on cable connection for power lines," he said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: May 16 2023 | 11:52 PM IST

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