Tuesday, 16 March 2021 12:02

India steps in to help Sri Lanka out of debt trap Featured

India, in a latest change of slightly strained economic relations, is now holding close and constructive discussions with Sri Lanka on a US$1.

1 billion swap facility, debt freezing arrangement, and development aid, official sources confirmed.

The Indo –Sri Lanka technical level discussions on the postponement of debt repayment and the offer of $45 billion loan from Exim Bank of India for Kankesanthurai Port development have been concluded in favour of Sri Lanka, a senior official of the State Ministry of Finance said.

Indian and Sri Lankan authorities will finalise the rescheduling repayment of loans and the country’s $1.1 billion currency swap facility which was pledged during President Gotabaya Rajapksa‘s visit to India last year.

Indian High Commissioner to Sri Lanka Gopal Baglay also held discussions towards this end at the senior level in Colombo on Sri Lanka’s requirements.

Sri Lanka is relieved to some extent in massive debt servicing problem with India’s positive response for necessary funding in the wake of China’s approval of $1.54 billion currency swap this week,

In another latest development, negotiations on Sri Lanka’s proposed controversial Economic and Technology Co-operation Agreement Year (ETCA) with India is expected to resume possibly in April this year following a deadlock of over two years,

ETCA faced heavy opposition from professional bodies, particularly in the IT and healthcare sectors, over the past few years on the grounds that Sri Lanka’s skilled labour force would be relegated to a second choice with preference given to Indian workers.


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