Sri Lanka India News: Sri Lanka expects further aid from India until IMF check arrives

Sri Lanka, suffering from its worst economic crisis since independence and plagued by political unrest, has asked India for bridge financing until the economic adjustment program can be negotiated and finalized with the International Monetary Fund (IMF).

The two sides are studying the possibility of increasing and restructuring aid provided by India in the form of loans for essential raw materials and fuel and to support the balance of payments, officials said. The meeting in New Delhi on Friday was attended by Indian Finance Minister Nirmala Sitharaman and Sri Lankan High Commissioner for India Milinda Moragoda. It was agreed that the established official-level mechanism to conduct the economic dialogue between the two countries should continue, officials said.

Moragoda briefed Sitharaman on developments in Sri Lanka. Earlier this month, Moragoda had met national security adviser Ajit Doval and asked for India’s help to gain global support.

Colombo said this week it plans to secure another $500 million short-term loan from India to buy petroleum products. This is in addition to a $200 million loan facility through . India has provided around $3.5 billion in aid since January. A crippling lack of foreign exchange reserves has led to long queues for fuel, cooking gas and other essentials, while power outages and soaring food prices have left people in misery.

“Strengthening Bonds”

On Friday, Sri Lankan Prime Minister Ranil Wickremesinghe thanked India for its support and wished to further strengthen ties. Wickremesinghe said he was grateful for the response from India and Japan to the proposal that the Quad should take the lead in setting up a foreign aid consortium to assist the crisis-hit country.

“I am grateful for the positive response from India and Japan to the proposal that the Quad members (US, India, Japan and Australia) take the lead in establishing a foreign aid consortium to assist Sri Lanka,” he said.

Earlier this month, India and Japan agreed to work together amid the current economic crisis and the worsening humanitarian situation in the country. The two countries have agreed to work together in support of Sri Lanka, the Japanese government said after a recent meeting between Prime Minister Narendra Modi and his Japanese counterpart Fumio Kishida on the sidelines of the Quad Summit in Tokyo.

Wickremesinghe’s statement came on the day India has donated 25 tons of medicines and other medical supplies worth nearly SLR 260 million. This was in response to requests from various organizations and hospitals spread across different parts of the country. The Indian High Commission said the humanitarian supplies are a continuation of the government’s ongoing support to the people of Sri Lanka in various forms such as financial aid, foreign exchange support, supplies of materials etc.

“These efforts are a testament to Prime Minister Narendra Modi’s Neighborhood First policy, which puts people-to-people engagement at its core,” the High Commissioner said in a statement.

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