India open to additional $2-billion aid for Sri Lanka

14 April 2022 08:29 am - 14 - {{hitsCtrl.values.hits}}

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India is willing to commit up to another $2 billion in financial assistance to Sri Lanka while also supporting the island nation with food and fuel, five sources told Reuters, as New Delhi tries to regain ground lost to China in recent years.

Sri Lanka, hit by its worst economic crisis since independence in 1948 and on the brink of its first debt default, has been asking friendly nations including India and China for credit lines, food, and energy. The Asian giants have already committed billions of dollars in financial support, the Reuters reported.

“We are definitely looking to help them out and are willing to offer more swap lines and loans,” said an Indian source aware of various discussions with Sri Lanka.

A senior government source in New Delhi said Sri Lanka’s warning on Tuesday, April 12, of defaulting on debt payments was a worry, but that “we can still give them up to $2 billion in swaps and support.”

Another source familiar with Sri Lanka’s thinking said it was seeking India’s help to roll over some $2 billion in dues, such as those owed to the South Asia-focused Asian Clearing Union. The source said the response had been positive from India.

All the sources had direct knowledge of the matter or had been briefed on it, but they declined to be named as the discussions were private.

India’s government and its central bank, as well as Sri Lanka’s foreign and finance ministries, did not immediately respond to requests for comment.

India has so far committed $1.9 billion to Sri Lanka in loans, credit lines, and currency swaps. Sri Lanka has also sought another $500-million credit line for fuel.

China has extended a $1.3-billion syndicated loan and a $1.5-billion yuan denominated swap, while negotiations are ongoing for more loans and credit lines.

One of the sources said New Delhi was keen for its southern neighbor to cut its reliance on China. Sri Lanka has an outstanding debt of about $3.5 billion with China – or 10.8% of the island’s total – and Beijing has also built ports and roads in the country.

“We want them to reduce their debt levels from China and we want to become stronger partners,” said the source.

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Comments - 14

sam Thursday, 14 April 2022 10:08 AM

India be careful as we have looters here

Appuhamy Thursday, 14 April 2022 10:09 AM

That's great India helping Sri Lanka, but not before helping herself with cheap Russian fuel, sold to SL @profit. Everyone wants a peace of Mother Lanka. The younger generation need stand tall !!

Sokrates Thursday, 14 April 2022 10:35 AM

The first condition for any further loans must be the abdication of the Rajapaksa clan. Another condition should be that Gota, MR and Silva are extradited to The Hague.

Lanka Shantha Thursday, 14 April 2022 10:43 AM

Trincomalee port to go next?

N SENA Thursday, 14 April 2022 10:57 AM

LOOKS LIKE SRI LANKA IS WELL AWARE AND CONFIDENT, OF THE OFFERS INDIA IS MAKING. INDIA SHOULD CAUTIOUS AS SRI LANKA WILL BE UNABLE TO REPAY ITS DEBTS

mdd Thursday, 14 April 2022 11:48 AM

mr.high commissioner and pm mody, many thanks. pl ask cbsl chief to prepare a priority list to spend. otherwise you have to grant more

Arvind Mittal Thursday, 14 April 2022 11:54 AM

Small nations are in habit of fleecing money from big nations in the name of geopolitics and balance of power. After the assistance from India exhausted, SA will turn to some other nation complaining the dominance of India.

Mandayan Thursday, 14 April 2022 12:25 PM

But India wants North and East!

JMan Thursday, 14 April 2022 03:55 PM

Mandayan, If we wanted to take your north and east, we would have taken it by now. We have paid u knowing well, that your leaders

sara Thursday, 14 April 2022 05:36 PM

this is also a golden opportunity for India if they really wanted resolve the tamil issue and implement 13th ammendment because SL has learnt the lesson that it can not survive without international community , will listen and should listen India at this time , I am not fishing in muddy water here

RP Thursday, 14 April 2022 05:37 PM

It’s a very welcoming move by our big friend . Thank you India for your assistance at a very dire time. Please use your leverage and muscle power to convince our current heads of the government to pack up and leave. That would be the best assistance India could help us besides, the Food, medicines and fuel. Thank you again India!

sam Thursday, 14 April 2022 05:47 PM

Better that you give us the medicines, food, fuel and gas

Indolanka Thursday, 14 April 2022 06:05 PM

Pretty soon there will be an amalgamation of both flags

Mandayan Friday, 15 April 2022 05:19 PM

@JMan: Common man, China is in the South and went to the North to explore new sites for pawns for further loans. India became concerned about its security and so, now jumped the gun to offer $3b and in return, it will ask, you know what. Shame that for 12 years, our illiterate leaders thought they can win votes by war victory euphoria, and by doing so they lost the diaspore investors to India and went to India with begging bowls.

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India open to additional $2-billion aid for Sri Lanka

Comments - 14

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