India Not To Provide Further Financial Aid To Crisis-Hit Sri Lanka? Indian Embassy Clarifies

Amid reports that India would not provide further financial support to Sri Lanka that is facing a severe economic crisis, the Indian High Commission on Tuesday said New Delhi would continue to be supportive of Colombo “all possible ways” for its growth. 

India has been the biggest provider of aid this year to Sri Lanka. The Narendra Modi government’s assistance to Lanka has reached almost $4 billion since January this year.

“We would like to emphasise that India has extended unprecedented bilateral assistance amounting close to USD 4 billion this year for ameliorating the difficulties faced by the people of Sri Lanka. India has also advocated to other bilateral and multilateral partners supporting Sri Lanka expeditiously in its current economic difficulties,” the Indian High Commission said in a statement.

The economic crisis in Sri Lanka triggered massive anti-government protests, leading to the resignation of Gotabaya Rajapaksa as president.

The protesters accused the Rajapaksa family of plunging the country into the worst economic crisis since the country’s independence in 1948 through mismanagement and corruption.

The Indian High Commission denied charges that India would no longer extend economic support to Sri Lanka and said, “We continue to be supportive of Sri Lanka in all possible ways, in particular by promoting long-term investments from India in key economic sectors in Sri Lanka for its early economic recovery and growth.” 

“Our bilateral development cooperation projects in Sri Lanka, which cumulatively total about USD 3.5 billion, are ongoing. Sri Lankans also continue to avail of scholarships for higher education and skills training in premier Indian institutions. These aspects of our close and long-standing cooperation with Sri Lanka also contribute to the efforts for addressing Sri Lanka’s current economic difficulties,” it further said.

The High Commission of India in another statement said that following a recent request from the Sri Lankan Government, it held the first round of discussions on September 16 in Colombo on restructuring the country’s bilateral official debt to India.

“The discussions held in a cordial atmosphere symbolise India’s support to early conclusion and approval of a suitable IMF Programme for Sri Lanka, for which financing assurances from creditors to make Sri Lanka’s debt sustainable are required. India will continue to remain closely engaged with relevant Sri Lankan stakeholders,” it said.

Sri Lanka and the IMF reached a preliminary agreement in early September for a loan of about $2.9 billion, which is contingent on the country receiving financing assurances from official creditors and negotiations with private creditors.