External Affairs Minister S Jaishankar to visit Sri Lanka on Thursday. AP.
New Delhi: India’s foreign minister Dr S Jaishankar will be visiting economic crisis-hit Sri Lanka this week to meet stakeholders and discuss debt restructuring.
Jaishankar’s two-day visit from Thursday is being keenly watched as it comes at a time when the Central Bank of Sri Lanka has urged India and China to restructure debt.
The island nation which has defaulted on its debt repayment has now been negotiating a $2.9 billion from the International Monetary Fund (IMF). However, IMF has expressed its unwillingness to release funds until India and China agree to reduce Sri Lanka’s debt.
Last week, Sri Lankan President Ranil Wickremesinghe said: “On January 19, the Indian foreign minister is expected to visit, and we will continue to have debt restructuring talks with India.”
Will India meet Sri Lanka’s requirements?
A report by The Hindu quoted sources in the Indian government saying that Jaishankar’s visit will focus on “supporting Sri Lanka” in its economic crisis.
“India is expected to give a positive response to Sri Lanka’s requirements, in keeping with India’s support last year as well,” the report quoted a source as saying.
Sources also said that the talks in the field of energy security, food security, currency swap arrangements as well as talks about restructuring Sri Lanka’s debt are underway.
What to expect from Jaishankar’s Sri Lanka visit?
The Hindu report also said that during Jaishankar’s visit, talks are likely on two possible Memorandums of understanding (MoUs) — on the Trincomalee development project and the long-pending plan for a cross-strait transmission line that would enable access to Sri Lanka to India’s plans for an energy grid along with other countries including Nepal, Bhutan and Bangladesh.
Also Read: Economic crisis-hit Sri Lanka’s central bank urges India, China to reduce debts at earliest
Jaishankar’s visit holds special significance as it is the first such meeting after the new government in Sri Lanka was formed six months ago. Apart from assisting Colombo with its current economic difficulties is a priority, the Indian foreign minister’s visit to the island nation would also include a comprehensive review of bilateral ties.
The report quoted diplomatic sources saying that the India’s support in the form of “written financial assurances” would be crucial for Colombo as it works with its other creditors to resolve its acute economic crisis.
India, China, Japan are Sri Lanka’s largest bilateral creditors
Sri Lanka has been facing one of its worst economic crisis since its independence in 1947. The country has been counting heavily on its largest bilateral creditors – India, China and Japan – for its economic revival.
Since early 2022, Sri Lanka has been using Indian credit lines to import essentials and fuel.
India’s lending to Sri Lanka is around $1 billion, while China is owed around $7 billion.
Meanwhile, Wickremesinghe said, “…The countries that have given us loans have already stated their willingness to assist us. Japan and the Paris Club, two of our three major creditors, have expressed their willingness to assist.”
The Sri Lanka president further said that his country would receive nearly $5 billion from the World Bank and Asian Development Bank.
“The total will be $7.5 billion, including from IMF. Adding $3 billion from the restructuring of unprofitable government agencies can add up to $10 billion, which will enable the economy to recover and bring the country out of this suffering,” he said.
Wickremesinghe said he was looking forward to the IMF facility in 3-4 tranches, adding, “I want to lift this country out of the plunge sooner.”
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