India provided 8 lines of credit worth $1.85 bn to Sri Lanka in past 10 years

India has extended eight lines of credit worth $1.85 billion to Sri Lanka over the past 10 years to boost development in sectors such as railways, infrastructure, defence, renewable energy, petroleum and fertilisers, external affairs minister S Jaishankar said on Friday.

These lines of credit are separate from the assistance of $3.8 billion extended to the country since the beginning of this year to cope with the island nation’s worst economic crisis.

In a statement tabled in the Lok Sabha in reply to a question, Jaishankar said India continues to assist Sri Lanka in its economic development and support it in overcoming economic challenges under the country’s ‘Neighbourhood First’ policy.

In January, India extended a $400-million currency swap to Sri Lanka under the South Asian Association for Regional Cooperation (SAARC) framework and deferred successive payments to the Asian Clearing Union settlements till July 6.

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A line of credit of $500 million was extended to Sri Lanka for importing fuel from India. India extended another credit facility of $1 billion to procure food, medicines and other essential items from India.

Humanitarian assistance was also provided to the island nation, including essential medicines worth about 6 crore ($750,000), 15,000 litres of kerosene oil and a line of credit of $55 million to procure urea fertilisers. The government of Tamil Nadu contributed rice, milk powder and medicines worth $16 million as part of the larger Indian assistance effort.

Development assistance under the lines of credit is extended in line with the guidelines of the Indian Development and Economic Assistance Scheme. The terms of these soft loans are transparent, with low rates of interest, moratorium on repayment of the principal, long repayment period, and in-built flexibility.