Sri Lanka secures $1 billion loan from India amid worsening economic crisis
17 March, 2022 | Mayukh Debnath
The Government of Sri Lanka and the State Bank of India are the parties to the agreement. The signing comes during the two-day visit of Sri Lankan Finance Minister Basil Rajapaksha.
Sri Lanka on Thursday inked an agreement for a credit line worth USD 1 billion with India. The signing comes amid the worsening economic condition of Sri Lanka. The credit line will ensure procurement of food items, medicines and other essential commodities. The Government of Sri Lanka and the State Bank of India are the parties to the agreement. The signing comes during the two-day visit of Sri Lankan Finance Minister Basil Rajapaksha.
The Sri Lankan minister held a meeting in Delhi with India’s Finance Minister Nirmala Sitharaman and Minister of External Affairs Dr. S Jaishankar after which the agreement was signed by the two countries. The ministers discussed wide-ranging issues of mutual interest and economic cooperation.
The signing of the credit line comes a day after Rajapaksa on Wednesday met PM Modi and thanked him for extending support for the Sri Lankan economy. PM Modi spoke about the central role that Sri Lanka occupies in India’s ‘Neighbourhood First’ policy and its S.A.G.A.R (Security and Growth for all in the Region) doctrine. Modi reiterated that India would continue to stand with the friendly people of the neighbouring country. Sri Lanka’s currency has experienced significant devaluation against major international currencies. The country has also been facing crippling fuel and gas shortages and daily power cuts,
Espousing India’s Neighborhood first policy, Jaishankar took to Twitter to express India’s support for Sri Lanka and said, “Neighborhood first. India stands with Sri Lanka. USD 1 billion credit line signed for the supply of essential commodities. Key element of the package of support extended by India.”