India supports debt restructuring and looks for long term investments

Sri Lanka received a clear commitment from India over restructuring debt paving the way closer to securing the International Monetary Fund (IMF) programme.

Indian External Affairs Minister Dr S. Jaishankar gave the assurance about the Indian commitment during a meeting with President Ranil Wickremesinghe.

During the visit India also highlighted the commitment of Government of India to re-double the efforts for long-term investment in several sectors.

Among them were projects on ports, shipping, renewable energy, hydrocarbons, manufacturing, health, IT, tourism, pharmaceuticals.

The President’s office and the Indian High Commission issued two separate press releases on the visit of Dr Jaishankar.

The President’s office statement said:

During a meeting held between President Ranil Wickremesinghe and India’s Minister of External Affairs Dr S. Jaishankar, it was agreed upon to implement a joint program between Sri Lanka and India.

President Ranil Wickremesinghe warmly welcomed the Indian External Affairs Minister at the Presidential Secretariat this morning (20) where the duo engaged in cordial discussions.

Prior to the official meeting, President Wickremesinghe hosted the visiting Indian External Affairs Minister Dr Jaishankar for breakfast and tea at his official residence at Paget Road, Colombo.

In addition, in the official meeting held between the President and Indian Foreign Minister Dr S. Jaishankar, many political, economic and social issues as well as investment matters between the two countries were discussed at length.

During this discussion, special attention was paid to the debt-restructuring program in Sri Lanka which had received a positive response from the Indian government.

The Indian External Affairs Minister recalled that in 1991, during the tenure of former Indian Prime Minister P.V. Narasimha Rao, India had to face an economic crisis similar to what Sri Lanka is currently facing. He added that the Indian Government overcame the crisis by pledging the government's gold reserves.

Therefore, Dr Jaishankar said that India has a good understanding of the situation Sri Lanka is currently facing and said that the Indian government will provide all possible support to solve the current economic problems faced by Sri Lanka.

The bilateral agreement related to raising the limit of the High Impact Community Development Project (HICDP) implemented in Sri Lanka with the support of the Government of India was also signed during the meeting.

The Secretary to the Ministry of Finance, Mr Mahinda Siriwardena, signed the agreement on behalf of Sri Lanka and the Indian High Commissioner to Sri Lanka HE Gopal Baglay  signed on behalf of India.

 This agreement guides many community development projects in Sri Lanka with the support of the Government of India.

This agreement related to community development projects in Sri Lanka was signed in May 2005. Its project limit was Rs. 300 million, which will now be doubled to Rs. 600 million by the agreement signed today.

Meanwhile, during Prime Minister Narendra Modi's visit to Sri Lanka in 2017, the foundation stone was laid for the construction of an Academy for Kandyan dancing as a gift given to Sri Lanka by the Indian Government and its people. The Indian Foreign Minister also virtually declared open the academy, which was built near the historical Dalada Maligawa in Kandy.

The handing over of 300 completed houses in Galle, Kandy and Nuwara Eliya – (100 houses each) under the housing project implemented in Sri Lanka with the support of the Indian Government, was also done virtually by the President and the Indian External Affairs  Minister. 

In this project of 60,000 houses, 50,000 houses have been completed. The third phase of the project of 400 houses for the people of the upcountry estate sector is currently underway and over 3,300 houses built under it have already been completed and are ready to be handed over to the beneficiaries.

The handing over of houses built in Anuradhapura and Badulla districts under the "Model Village Housing Program" implemented with the support of the Government of India for low-income families in Sri Lanka, were also symbolically handed over to the beneficiaries.

Senior Advisor to the President on National Security and Presidential Chief of Staff Mr Sagala Ratnayake, President's Secretary Mr Saman Ekanayake and other officials and a special Indian delegation attended the discussion.

The Press release issued by the Indian High Commission:

External Affairs Minister (EAM) of India Dr. S. Jaishankar paid an official visit to Sri Lanka on 19-20 January 2023. In his fourth bilateral visit to Sri Lanka as EAM, he was accompanied by a four-member official delegation from the Ministry of External Affairs, New Delhi. It may be recalled that EAM has visited Sri Lanka earlier in November 2019, January 2021 and March 2022.

2.     During the visit, EAM called on President H.E Ranil Wickremesinghe and Prime Minister H.E Dinesh Gunawardena and had detailed discussions with his counterpart, Foreign Minister Hon. M.U.M Ali Sabry.  The delegation-level meeting hosted by the Foreign Minister of Sri Lanka included Minister of Ports, Shipping and Aviation Hon. Nimal Siripala de Silva; Hon. Keheliya Rambukwella, Minister of Health; Hon. Ramesh Pathirana, Minister of Industries, Hon. Dilum Amnugama, Minister of Investment Promotion; Hon. Kanchana Wijesekara, Minister of Power and Energy; and Hon. Tharaka Balasuriya, State Minister of Foreign Affairs, among others, and reflected the breadth and depth of the growing partnership between India and Sri Lanka in diverse spheres.

3.     Interaction of EAM with the leadership of the Government of Sri Lanka provided an opportunity to review the whole gamut of bilateral relations between the two countries. He stressed that his presence in Sri Lanka at a time when the country was going through multiple challenges sends a clear and strong message of continued support from the Government and the people of India to the people of Sri Lanka.

4.     EAM underscored that India’s unprecedented financial support of USD 4 billion last year was in line with the ‘Neighbourhood First’ Policy. He pointed out that India was the first creditor nation of Sri Lanka to support debt restructuring and convey financing assurances to IMF in order to clear the way forward for Sri Lanka and in securing the IMF programme. He added that India will encourage greater investments in the Sri Lankan economy, in several key sectors. He emphasized that India is prepared to go the extra mile when Sri Lanka feels the need. He welcomed the in-principle agreement on a renewable energy framework in the context of addressing Sri Lanka’s energy security challenges.

5.     President H.E Ranil Wickremesinghe and EAM virtually inaugurated a building for the Kandyan Dancing Academy in Pallekele whose foundation stone was laid by Prime Minister Narendra Modi during his visit to Sri Lanka in May 2017. This grant project underlines Government of India’s commitment to preserve and promote Sri Lanka’s rich cultural heritage. Around 350 housing units built with Government of India grant assistance in Galle, Kandy, Nuwara Eliya, Anuradhapura and Badulla Districts were also handed over in a virtual format on the occasion. Governments of India and Sri Lanka exchanged letters to confirm doubling the ceiling of individual projects as well as overall financial capital for the implementation of grant initiatives carried out under High Impact Community Development Project (HICDP) framework of India. Testifying to the comprehensive and people-centric nature of development cooperation partnership, EAM ceremonially handed over 50 buses supplied under an ongoing credit line for the supply of 500 buses to Hon. Bandula Gunawardena, Minister of Transport and Highways of Sri Lanka towards strengthening the public transport infrastructure. Multi-pronged assistance to Sri Lanka in diverse spheres signify Government of India’s abiding commitment to stand with the people of Sri Lanka through various capacity building projects and other programmes towards economic stabilization and recovery of Sri Lanka.

6.     EAM appreciated the steps undertaken for the resumption of Jaffna-Colombo flights and expressed hope that ferry services between India and Sri Lanka will resume at the earliest.  He underscored that India continues to be the single largest source of tourists for Sri Lanka and discussed various measures for promoting religious tourism between the two countries. He noted that initiatives undertaken towards promotion of trade and tourism between the two countries could pave way for greater interaction between the people of the two countries as well as shared prosperity.

7.     EAM conveyed that Government of India is positively considering the request from senior leadership of Sri Lanka for exposition of the sacred Kapilavastu Relics of Buddha in Sri Lanka this year. He took note of various joint initiatives such as commemorative postage stamps and coins to mark the 75 years of establishment of diplomatic relations as well as 75 years of Independence of the two countries.

8.     Dr. S. Jaishankar called on former President Mahinda Rajapaksa during the visit. He also met Hon. Sajith Premadasa. In addition, he held meetings with leaders of various political parties such as ITAK, TELO, PLOTE, EPRLF, TNP, TNPF, SLMC and ACMC.

9.     Hon. Jeevan Thondaman, Minister of Water Supply and Estate Infrastructure Development-led Ceylon Workers’ Congress   leaders and leaders of Tamil Progressive Alliance highlighted the socio-economic difficulties faced by people of plantation areas and sought India’s support in addressing their problems. Highlighting numerous initiatives undertaken by Government of India for the upliftment of the region, EAM noted that 2023 marks 200 years of arrival of Indian-origin-Tamils to Sri Lanka. It bears mention that Assistant High Commission of India in Kandy which closely works with the community marks 100 years of its establishment this year.

10.   EAM discussed fisheries and associated topics between the two countries separately with the President of Sri Lanka and Hon. Douglas Devananda, Minister of Fisheries. He emphasized the need to address these challenges in a humanitarian manner. The discussion also focused on the livelihood concerns which influence the decisions of fishermen to undertake such expeditions.

11.   EAM conveyed to the President of Sri Lanka greetings from Prime Minister Narendra Modi and handed over an invitation from him to visit India at an early mutually convenient date.

12.   The visit of the External Affairs Minister underscores the central place Sri Lanka occupies, as the closest maritime neighbour, in India’s ‘Neighbourhood First’ Policy. It also highlighted the commitment of Government of India to re-double the efforts for long-term investment in sectors of priority for Sri Lanka such as ports, shipping, renewable energy, hydrocarbons, manufacturing, health, IT, tourism, pharmaceuticals so as to accelerate economic recovery and bring prosperity to Sri Lanka.