Sri Lanka’s Finance Minister to visit India to further strengthen bilateral ties
Sri Lanka’s Finance Minister Basil Rajapaksa is scheduled to make a second visit within three months to India in mid-February to further strengthen bilateral ties.
The Minister has told a news conference that in addition to the already finalised US$ 900 million support from India, a further US$ 1 billion has also been committed by neighbouring India.
“We hope to finalise the US$ 1 billion worth import trade financing by end-February or early March. This will help ease the Balance of Payment pressure on Sri Lanka as India is among the two top trading nations apart from China which have a favourable trade deficit against Sri Lanka,” Rajapaksa has stated.
Meanwhile, the Export Import Bank (EXIM) of India and the government of Sri Lanka last week signed a US$ 500 million Line of Credit (LOC) agreement to purchase petroleum products.
India stated that as Sri Lanka’s closest neighbour and longstanding partner, it was committed to assist Sri Lanka in its post-COVID economic recovery.
“Signing of the LOC Agreement is another landmark in our bilateral cooperation and is in continuation of India’s recent foreign exchange support of over US$ 900 million to Sri Lanka,” a statement by the Indian High Commission said. “These measures are in line with the discussions between the two sides during the visit of the Minister of Finance to India in December 2021. With the recent support, India’s overall development assistance to Sri Lanka stands at close to US$ 4 billion,” the statement added.
Sri Lanka and India enjoy strong bilateral and trade ties that have been further strengthened by an operational free trade agreements. Sri Lanka’s close proximity to India as well as the priority status granted to Indian businesses have attracted many Indian businesses/investors to the island and vice versa. India is also a key development partner of Sri Lanka. Given the resilience and expansion shown by Sri Lanka’s economy despite the pandemic, Indian businesses could explore the growing opportunities in Sri Lanka while also looking at the possibility of forming partnerships or joint ventures with local businesses. Other foreign businesses/investors interested in doing business with India could look at setting up base in Sri Lanka to engage with India using the priority status enjoyed by Sri Lanka in India.
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