Development projects in Sri Lanka more through investments, grants, India says

Colombo | India has completed 60 grant projects in Sri Lanka and implementing 16 more currently, the development coming more through investments and grants and relatively less through debt instruments, India's envoy to Sri Lanka said on Tuesday.

Santosh Jha, the High Commissioner of India to Sri Lanka, also reaffirmed India's support for island nation's debt restructuring efforts, securing IMF support, and extending bilateral financial support to overcome immediate challenges.

Emphasising the importance of a robust partnership between India and Sri Lanka, highlighting the intertwined destinies of the two nations, Jha – who was speaking at the 45th National Conference of CA Sri Lanka – underscored the shared geography, history, and future that bind the two countries.

“India is looking at assisting development of Sri Lanka through investments and grants and relatively less through debt instruments. This, we believe, serves Sri Lanka better given its recent experiences with debt burdens,” the Indian envoy was quoted as saying by news portal NewsFirst.lk.

Last week, Sri Lanka said the recent visit by External Affairs Minister S Jaishankar was important in ending its debt restructuring with international sovereign bond holders.

Jaishankar, who made a day-long trip to Sri Lanka on October 4, was the first foreign dignitary to visit the island nation after Anura Kumara Dissanayake assumed office as the new president on September 23.

Pointing out that India has completed 60 grant projects and implementing 16 more at this time, Jha said, “Our development projects are now implemented in all 25 districts of Sri Lanka. We have completed 60 grant projects and are implementing 16 more at this time.”

Jha also advocated for a connectivity corridor between India and Sri Lanka to enhance access to global markets and opportunities, the portal said.

The High Commissioner reiterated the necessity for India and Sri Lanka to work together, transcending old mindsets and focusing on shared goals to ensure mutual prosperity and stability in the region, the portal added.

“We must work hand in hand and grow and prosper together. Like it or not, we are naturally intertwined and interlinked by geography, history, tradition, and by our future. We are irreplaceable, indispensable, and inextricable as partners,” Jha said and warned that any attempts to create divisions would be detrimental to both nations' shared aspirations and future.

In April 2022, the island nation declared its first ever sovereign default since gaining Independence from Britain in 1948. The unprecedented financial crisis led the then president Gotabaya Rajapaksa to quit office in 2022 amid civil unrest.

India had then pitched in with about USD 4 billion in assistance to enable the island nation to recover from a deep economic crisis after it announced the default on over USD 51 billion foreign loans.

In July this year, the Sri Lankan government reached a debt restructuring deal with international sovereign bondholders after protracted negotiations with countries such as China, India, France and Japan.

Sri Lanka is currently in negotiations with the International Monetary Fund (IMF) for the next tranche of the USD 2.9 billion bailout package for which the IMF has made external debt restructuring conditional.