Four-pillar Eco. Indo-Sri Lanka partnership: New Delhi gives 1 Billion USD credit

India's assistance of USD 1 billion loan to Sri Lanka would be used for importing food, medicines and other essential items.

New Delhi: Strengthening India-Sri Lanka bond further and opening up new vistas, India on Thursday (March 17) announced a USD 1 billion line of credit to Sri Lanka as part of its financial assistance to help the island nation deal with its economic crisis.

"The USD 1 billion loan facility, which formed the key component of the four-pillar economic cooperation arrangement agreed between India and Sri Lanka during Minister Rajapaksa's visit to New Delhi in December last year, was extended to the government of Sri Lanka for procurement of food, medicines and other essential items," the Sri Lankan high commission said in a statement.

Sri Lanka has landed into economic troubles due to its one-sided and faulty policies favouring China.

After an agreement to extend the line of credit was inked, Ministry of External Affairs (MEA) spokesperson Arindam Bagchi said India has always stood with the people of Sri Lanka and will continue to extend all possible support to the southern neighbour. 

At the weekly media briefing, he said the assistance would be used for importing food, medicines and other essential items.

"India has always stood with the people of Sri Lanka and we will continue to extend all possible support at this juncture. I think we are cognizant of the economic difficulties the country is facing," Bagchi said.

Visiting Sri Lankan Finance Minister Basil Rajapaksa witnessed the signing of the agreement for the USD 1 billion line of credit being extended through the State Bank of India (SBI).

The signing ceremony was held at the Ministry of Finance in the presence of Rajapaksa, External Affairs Minister Dr S Jaishankar and Union Finance Minister Nirmala Sitharaman.

The visiting Minister held meetings with Dr Jaishankar and called on Prime Minister Narendra Modi on Wednesday, March 16. During the meeting, Mr Modi reiterated India would "continue to stand" with the friendly people of Sri Lanka.

Last month, India extended a USD 500 million line of credit to Sri Lanka to help it purchase petroleum products as the island nation has been reeling under a severe foreign exchange and energy crisis.

Rajapaksa also met Minister of Power and New and Renewable Energy R. K. Singh and discussed ways and means to further deepen and broaden bilateral cooperation in the power and renewable energy sector.

During the bilateral talks, the two sides agreed to set up a framework for short, medium and long-term economic cooperation between the two countries aimed at addressing Sri Lanka's present economic challenges.