Commited Over $3 Billion To Sri Lanka This Year, Says India

Sri Lanka people protest against Sri Lankan President Gotabaya Rajapaksa

(REUTERS / Dinuka Liyanawatte)

India has committed more than $3 billion to debt-ridden Sri Lanka in loans, credit lines and credit swaps since January this year, the Indian High Commission said on Tuesday, as the island nation faces its worst economic crisis since independence.

On Monday, India had extended credit by a further $200 million to replenish Sri Lanka’s rapidly depleting fuel stocks.

The crisis in Sri Lanka is caused in part by a lack of foreign currency, which has meant that the country cannot pay for imports of food and fuel, leading to acute shortages and high prices. “The $1 billion credit facility for the purchase of food, medicines and other essential commodities is already operational,” a statement from the Indian High Commission said, adding that around 16,000 metric tonnes of rice supplied by India is also being distributed.

“A separate Line of Credit of $500 million for the purchase of petroleum products, such as diesel, petrol and aviation fuel has paved the way for the delivery of nine consignments of different types of fuel,” it said.

In February, New Delhi had granted  $500 billion as short-term loan to Sri Lanka to procure fuel stocks.

“Close to 400,000 MT of fuel have been delivered till date and more consignments will arrive soon,” the statement added.

Overall economic assistance which stands a shade above  $3 billion in 2022 alone has been of various kinds – $1 billion credit line for essentials; $500 million credit line for purchase of petroleum products; $400 million bilateral currency swap; and over $1 billion under the Asian Clearing Union Framework.

The Sri Lankan government said it would temporarily default on its foreign debt amounting to $35.5 billion as the Covid-19 pandemic and the war in Ukraine made it impossible for it to make payments.

The Gotabaya Rajapaksa regime has also asked for an International Monetary Fund bailout, which could take up to three months to arrive.

Comments Months of lengthy blackouts and acute shortage of food, fuel and pharmaceuticals have triggered widespread protests across the nation.