India Extends Aid Worth USD 3.9 Billion to Help Sri Lanka Face of Economic Crisis
In February 2022, India in order to help Sri Lanka overcome its fuel shortage, signed an agreement for the supply of petroleum products worth USD 500 million from the Indian Oil Company through a credit line.
Colombo, January 14: India extended aid worth USD 3.9 billion to help Sri Lanka sustain itself in face of the acute economic and financial crisis and meet its immediate needs such as medicines, cooking gas, oil and food items, Sri Lanka based news publication News 19 reported.
In February 2022, India in order to help Sri Lanka overcome its fuel shortage, signed an agreement for the supply of petroleum products worth USD 500 million from the Indian Oil Company through a credit line. What Is Recession? How To Prepare For Recession? As Risk of Global Recession Rises, Here's All You Need To Know.
This was expanded by an additional USD 200 million worth of petroleum products in April 2022. India's EXIM bank and State bank of India, for the import of essential commodities, extended export credit facilities worth USD 1,500 million to Sri Lanka. India also concluded a USD 400 million agreement with Sri Lanka to help preserve the country's forex reserves.
A USD 1 billion credit line for essential goods, a USD 500 million credit line for fuel, and a USD 55 million credit line for fertiliser have been extended to Sri Lanka, News 19 reported.
India has been helping Sri Lanka with donations out of goodwill and humanitarian assistance. India will supply Sri Lankan Transport Department with a fleet of 500 buses. A total of 75 buses were handed over to Sri Lanka by India's High commissioner to Sri Lanka Gopal Bagalay.
According to News 19, India's support to Sri Lanka is in line with its 'Neighbourhood First' policy under which India prioritises the security and development of its neighbours. Recently, Sri Lankan President Ranil Wickremesinghe said that as Sri Lanka walks into the New Year with the baggage from 2022, 2023 will be a critical year for the country to turn around its crisis-struck economy, reported Daily Mirror.
According to the Daily Mirror report: "Wickremesinghe in his New Year message acknowledged that the citizens of the country are looking at the year 2023 after having undergone the bleakest of times, immense hardships, as well as the uncertainties and hopelessness of last year.".
Wickremesinghe said: "I understand the great burdens placed on all of us and the setbacks that a majority of us have suffered due to the country's abject economic collapse."
The critical situation of the currency crisis in Sri Lanka has resulted in political, economic and social turmoil. Further, this currency collapse has resulted in a rise in food prices by 100 per cent in two years. Amid all this, President Wickremesinghe has sought support, The Island Online reported. World Bank Says Fragile Economic Conditions Might Usher in Recession.
In Sri Lanka around 40 per cent of households depend on agriculture. And two out of ten homes have suffered income reduction from June to December 2022. And to recover from the income reduction one out of two households use negative coping mechanisms like loans to cope with the lack of food or money to buy it, according to The Island Online.
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