Sri Lanka’s Finance Minister Basil Rajapaksa met Prime Minister Narendra Modi in New Delhi on Wednesday morning to discuss bilateral relations and Indian assistance to the island nation, which is undergoing an unprecedented economic crisis.
Milinda Moragoda, Sri Lanka’s High Commissioner to India, attended the meeting. India is widely expected to approve an additional $1 billion in emergency financial assistance that New Delhi and Colombo have been negotiating since Mr. Rajapaksa’s December visit to New Delhi.
He met with External Affairs Minister S. Jaishankar and Finance Minister Nirmala Sitharaman at the time, and the two sides agreed on a “four-pronged” approach to resolving Sri Lanka’s crisis, which included Indian credit lines for imports of essentials such as food, medicines, and fuel; a currency swap to help boost Sri Lanka’s foreign reserves; a “early” modernisation of the Trincomalee oil tank farm; and Colombo’s
India has provided $1.4 billion in assistance since January, including a $400 million RBI currency swap, a $500 million loan deferment, and a $500 million line of credit for fuel imports. If approved, the additional $1 billion will provide some relief to Sri Lanka, which is currently experiencing fuel and gas shortages and skyrocketing prices for food and other basic items.
Signature of critical agreements with Sri Lanka
Between Mr. Rajapaksa’s two visits to New Delhi over a four-month period, India and Sri Lanka signed a number of significant agreements, both at the government level and involving private Indian investors. On January 6, Lanka IOC, a subsidiary of Indian Oil Corporation, Ceylon Petroleum Corporation, and the Sri Lankan government signed three agreements to develop the Trincomalee oil tank farm in eastern Sri Lanka in collaboration.
On March 11, the National Thermal Power Corporation (NTPC) and the Ceylon Electricity Board (CEB) signed an agreement to jointly establish a solar power plant in Sampur, Trincomalee. On the same day, the Adani Group agreed to establish two renewable energy projects in northern Sri Lanka at an estimated cost of $500 million, though neither party disclosed the agreement.
Discuss numerous issues
Mr. Modi and Mr. Rajapaksa discussed a range of bilateral issues, including agriculture, fisheries, tourism, and sustainable energy, according to a statement issued by the Sri Lankan High Commission in New Delhi.
“The Prime Minister and the (visiting Sri Lankan) Minister spoke about Sri Lanka’s decision to transition to organic agriculture. Prime Minister Modi emphasised the benefits of natural farming and India’s experience developing related techniques and products, including nano-fertilizers, that may be of interest to Sri Lanka,” according to the statement.
Sri Lanka’s abrupt conversion to organic farming last year drew widespread condemnation from farmers and scientists, who warned of an impending food crisis this year.
Additionally, the two sides agreed that cooperation on renewable energy development in Sri Lanka “should be pursued vigorously,” just days after the NTPC and the Adani Group signed separate agreements to establish solar and other renewable energy projects in northern and eastern Sri Lanka.
Program for digital identification
Additionally, the recent proposal for bilateral cooperation on the Sri Lankan government’s digital identity programme, which is similar to Aadhaar, was discussed.
Mr. Modi and Mr. Rajapaksa acknowledged the fisheries conflict’s “complex and multidimensional aspects,” including humane treatment of fishermen, livelihood, enforcement, ocean ecology, and the early release of arrested fishermen and their boats, the statement said, adding that the two sides agreed on the “urgent need to find a lasting solution to this complex issue.”