- Sri Lanka, which is facing economic crisis and China’s debt, got India’s support
- India will help by giving economic package to Sri Lanka, investment in different sectors
- Sri Lanka’s oil bill jumps 41.5 percent in first seven months to $2 billion
India’s neighboring country Sri Lanka is currently facing economic crises and China’s debt. A few days ago, Sri Lanka’s Finance Minister Basil Rajapaksa had visited India. It is reported that India is preparing a package to help Sri Lanka on an ‘immediate basis’. Officials told the Economic Times that India may extend the food and health security package to Sri Lanka on an immediate basis.
According to the report, along with energy security package and currency swap, Indian investment can also get a boost. During Rajapaksa’s visit, it was agreed that procedures would be finalized soon with mutual consent to meet these objectives. The Food and Health Security Package envisages extension of a line of credit to cover imports of food, medicines and other essential commodities from India.
India will invest in different areas of Sri Lanka
The energy package will also include a line of credit to cover fuel imports from India and modernization of the Trincomalee oil tank farm. Officials said a ‘currency swap’ has also been offered to Sri Lanka to resolve its current payment issues. It has also been decided to facilitate Indian investment in various sectors in Sri Lanka which will contribute to the growth and expansion of employment.
China’s debt burden on Sri Lanka
During his visit to India, Rajapaksa briefed the Indian side about the economic situation in Sri Lanka and his government’s approach to deal with the challenges post-Covid. This was Finance Minister Rajapaksa’s first foreign visit since taking office in July this year. After Covid, Sri Lanka is struggling with economic crisis and increasing debt of China. Sri Lanka’s oil bill jumped 41.5 per cent to $2 billion in the first seven months of this year compared to last year. To boost its sluggish economy, it has now sought help from India.