Sri Lanka invites more Indian investment in ports, infrastructure, energy and manufacturing sectors

Sri Lanka has urged more Indian investment in ports, infrastructure, energy, power and manufacturing sectors, days after New Delhi announced a $900m loan to Colombo to build up its reserves currency depleted and for food imports amid shortages of almost all essential commodities in the island nation.

Sri Lankan Finance Minister Basil Rajapaksa held talks with External Affairs Minister S Jaishankar on Saturday during which the two ministers discussed India’s investment projects and plans that would boost the economy of the island nation.

While thanking India for the economic package, Rajapaksa welcomed more Indian investment in Sri Lanka and assured that an enabling environment would be provided which would benefit both parties.

Rajapaksa recalled India’s longstanding cooperation with Sri Lanka and deeply appreciated the gestures of support.

He hailed Indian investment in Sri Lanka in a number of important areas including ports, infrastructure, energy, renewables, power and manufacturing and assured that an enabling environment will be provided to encourage these investments, according to a press release issued by the Indian side. .

During the meeting, the two ministers noted that the recent steps taken by Sri Lanka to jointly upgrade Trincomalee oil parks will boost investor confidence, in addition to bolstering Sri Lanka’s energy security, he said. added.

Earlier this month, Sri Lanka signed an agreement with India to jointly redevelop the strategic WWII-era oil tank farm in the eastern port district of Trincomalee, in a new stage of the partnership. bilateral economic and energy.

India’s extension of $400m to Sri Lanka under SAARC currency swap deal and postponement of $515.2m ACU settlement, analysts say two months is an essential aid in the current situation of foreign exchange shortage in Sri Lanka.

Jaishankar said that India has always supported Sri Lanka and will continue to support Sri Lanka in every possible way to overcome the economic and other challenges posed by the COVID-19 pandemic.

As close friends and maritime neighbours, India and Sri Lanka stand to gain from closer economic ties, the Foreign Minister said.

The two ministers also reviewed the progress made in extending India’s $1 billion credit facility for the import of food and other essential items.

Leading economist and former Deputy Governor of Sri Lanka’s Central Bank, WA Wijewardena, said last week that while India’s economic package has given Sri Lanka some breathing room, tough measures, including a bailout from the International Monetary Fund (IMF), were needed to prevent the economy from heading into a perpetual slump.

Sri Lanka is facing its worst currency crisis ever after the pandemic hit the country’s income from tourism and remittances. By December, the reserve position had fallen to just one month of imports or just over $1 billion.

In recent months, the public has experienced a shortage of many basic necessities due to the currency crisis. Import restrictions to save money have threatened the supply of cooking gas and fuel in addition to impending power cuts.

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