Colombo needs more, India may up aid by $2 billion

India has so far committed $1.9 billion to Sri Lanka in the form of credits for essential commodities and fuel, and also in loans and currency swaps. Union Finance Minister Nirmala Sitharaman met Sri Lanka’s High Commissioner to India Milinda Moragoda Wednesday to review the status of Indo-Lanka economic cooperation as Colombo enters negotiations with the IMF for an economic adjustment programme.

Reuters reported Wednesday that India “is willing to commit up to another $2 billion in financial assistance to Sri Lanka…as New Delhi tries to regain ground lost to China in recent years.”

The agency quoted a senior government source as saying that Sri Lanka’s warning on Tuesday of defaulting on debt payments was a worry but that “we can still give them up to $2 billion in swaps and support”.

Reuters quoted another source “familiar with Sri Lanka’s thinking” that it was seeking India’s help to roll over some $2 billion in dues, such as those owed to the South Asia-focused Asian Clearing Union. The source “said the response had been positive from India,” the agency reported.

The issue of New Delhi extending bridging finance required by Colombo until its economic adjustment programme with the IMF was negotiated was also discussed, which could potentially make India the first country to support Sri Lanka in this manner, a statement from the High Commission of Sri Lanka in India said.

Source: https://indianexpress.com/article/business/economy/sri-lanka-convoy-meeting-colombo-needs-more-india-may-up-aid-by-2-bn-7868324/