India supports economic recovery in crisis-hit Sri Lanka | world news

COLOMBO (Reuters) – India’s top diplomat held talks with the President and Prime Minister of Sri Lanka on Thursday, as India signaled its willingness to go beyond the $4 billion in loans, swaps and aid it has already extended to its cash-strapped neighbor.

Sri Lanka is facing its worst economic crisis in seven decades, with a severe foreign exchange shortage hampering imports of essentials including food, fuel and medicines.

The island nation off the tip of southern India needs about $5 billion over the next six months to meet the basic needs of its 22 million people who are struggling with long queues for basic necessities, worsening shortages and power outages.

Indian Foreign Minister Vinay Kwatra, accompanied by other Indian officials, held talks with President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe on providing further financial support to the country, the President’s office said in a statement.

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“Indian Foreign Minister Vinay Kwatra has said that the Government of India will extend its fullest support to Sri Lanka in overcoming the current difficult situation as a close friend,” the statement said.

“The Indian delegation stated that the Indian government and political authorities are committed to continue supporting Sri Lanka,” she added.

The Indian team held a separate meeting with central bank governor Wickremesinghe and Treasury officials, an official from the prime minister’s office said.

India has been the top source of foreign aid to Sri Lanka this year, providing more than $4 billion, Wickremesinghe told parliament this week.

Neighbors are also in talks for additional support, including a $500 million credit line for fuel and help import fertilizer and rice, while Sri Lanka tries to stave off a food crisis, officials said.

Sri Lanka plans to hold a pledging conference with China, India and Japan, Wickremesinghe said, while continuing talks with the International Monetary Fund over a bailout package worth about $3 billion.

(Reporting by Uditha Jayasinghe, editing by Robert Birsel and Bernadette Baum)

Copyright 2022 Thomson Reuters.

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