India is planning to provide further financial assistance to neighbouring country Sri Lanka after providing aid worth $3.8 billion since January this year, reported Indian Express on Tuesday.
"The idea is to respond to Sri Lanka's requests for enabling them to meet their foreign exchange crisis. We would like to continue to bring more investment into Sri Lanka because that will help create medium- and long-term capacity to respond within the Sri Lankan economy," Reuters reported Gopal Baglay, India's high commissioner in Sri Lanka, as saying.
According to news agency ANI, the country's finance ministry said that in the four months through April India has emerged as a top lender for the island nation.
India's disbursements of foreign loans and grants from January 1 to April 30, 2022 were 376.9 USD million compared to China which was only 67.9 USD million.
India has come to rescue Sri Lanka which is currently under a severe economic crisis. The island country is facing an acute shortage of foreign currency along with food and fuel crisis.
As per ANI, the country's finance ministry report said, "In February 2022, India and Sri Lanka signed an agreement for a USD 500 million supply of petroleum products from the Indian Oil Company through a credit line, this was expanded by a further USD 200 million in April."
"Whilst these credit lines have provided important supply channels, Ceylon Petroleum Corporation (CPC) continues to face significant difficulties in procuring adequate fuel largely due to limitations in the availability of foreign exchange and external financing challenges," reported ANI citing the report.
Sri Lankan Government has made arrangements to mobilize foreign financing of USD 1,550.5 million by entering into 4 agreements with foreign development partners and lending agencies from 1st January to 30th April 2022, to support the public investment program. One agreement was of USD 1,500.0 million of Export credit Facilities extended by the EXIM Bank and State bank of India for the import of essential commodities.
As of April 30, 2022, the total undisbursed balance of foreign financing available from already committed loans that are to be utilized in the next 3-5 years, was USD 8,054.3 million.
India has the majority of the balance to be disbursed followed by, the Asian Development Bank, World Bank, China, and Japan respectively.
Read more at: https://economictimes.indiatimes.com/news/india/india-plans-to-invest-more-in-sri-lanka-after-crisis-support-of-3-8-bn/articleshow/92970521.cms
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