India comes to Sri Lankan peoples' rescue amid worsening economic situation
Mar 17, 2022
New Delhi [India], March 17 : The Indian government has progressed on the path of ensuring bilateral relations with its immediate neighbour Sri Lanka amid the worsening economic situation in the island nation.
Sri Lanka on Thursday signed USD 1 billion credit line with India for procurement of food, medicines and other essential items.
The agreement was signed between the State Bank of India (SBI) and the Government of Sri Lanka, during Sri Lankan Finance Minister Basil Rajapaksha's two-day visit to India.
Analysts say that foundations have been laid for improving relationships with its immediate neighbours within the SAARC community. Though India has attempted to better relations between the countries, neighbours like Pakistan rebuffed these overtures to further fall into the debt trap of the Chinese government.
While Sri Lanka also signed numerous similar agreements with China, it was quick to understand after the Hambantota debacle that these wide cast loans at negligible interests were a trap.
At this critical juncture, Sri Lanka sought Indian support. As has been the case at different times, India intervened to help Sri Lanka tide over the immediate difficulties with a series of economic package announcements like a USD 1 billion line of credit, a currency swap arrangement of USD 400 million and a debt deferral of USD 515 million for two months.
These announcements were necessary for Colombo to escape from the debt trap of loans that China had cast through numerous contractual agreements. Additionally, these would help in the purchase of essential food items, pharmaceutical products and oil for the beleaguered Sri Lankan nationals, who are facing severe economic hardships.
Indian private sector has also evinced interest in cooperating /capacity building in sectors like hospitality, food processing, cement as well as pharmaceutical production. It must also be noted that Sri Lanka took the opportunity to invite the Indian Prime Minister to the BIMSTEC summit in Columbo at the end of this month to engage in substantive bilateral talks.
On the issue of Tamil reconciliation, India has consistently pushed for the devolution of power to North and East Sri Lanka, to which the Sri Lankan authorities have finally responded. A committee of experts has been instructed to submit a draft on the issue within two months to the President's Council in Sri Lanka, after arriving at sufficient consensus amongst the Sinhalese majority.
Against this backdrop, many Sri Lankan families went on record, as per the local dailies, to state that there now existed a feeling amongst Sri Lankans that India had stepped in when they needed them the most.
