Sri Lanka to capitalise on India’s Neighbourhood First policy to gain assistance

• India will extend food and health security package on an urgent basis via an extension of a line of credit
• A currency swap will be offered to help SL address current balance of payment issues
• Early modernisation of Trincomalee Tank Farm agreed 
• To open up direct lines of communication for regular contact  

Capitalising on India’s ‘Neighbourhood First’ policy, Finance Minister Basil Rajapaksa, during his recent visit to New Delhi, firmed up the need for cooperation in four key areas that would help the island ease the hiccups it faces at present. 

In what was Finance Minister’s first visit to India since he assumed office, Rajapaksa brought the neighbouring giant up to date on Sri Lanka’s need for assistance, which will be sought via the further deepening of bilateral relationships and economic cooperation. 

At the series of meetings held on December 1 and 2, India expressed solidarity with Sri Lanka at the current juncture it stands in, said the Sri Lankan High Commission in New Delhi in a statement shared with the local media yesterday. 

As per the discussions held by Rajapaksa with India’s key ministers, Sri Lanka will receive a credit line for the areas of food, health, energy and finance. 

Rajapaksa, during his two-day visit that ended on Thursday (December 2), met with India’s Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman, External Affairs Minister Dr. Subrahmanyam Jaishankar, Petroleum and Natural Gas Minister Shri Hardeep Singh Puri and National Security Advisor of India Shri Ajit Kumar Doval as well. 
Under the short and medium-term cooperation discussed, India will extend food and health security package on an urgent basis that would envisage an extension of a line of credit to cover the import of food, medicines and other essential items from India to Sri Lanka. 

Under the energy security package, a line of credit will be extended to cover the import of fuel from India and an early modernisation of the Trincomalee Tank Farm.

Furthermore, while a currency swap will be offered to help Sri Lanka address the current balance of payment issues faced, India will also facilitate investments in the island, across diverse sectors, with the objective of Sri Lanka achieving higher economic growth and greater employment opportunities. 

The Sri Lankan High Commission in India said that during the meetings it was agreed that the modalities to realise these objectives would be finalised early, within a mutually agreed timeline.  

Meanwhile, Rajapaksa and Sitharaman and Jaishankar have agreed to open direct lines of communication and to be in direct and regular contact with each other in order to coordinate the initiatives discussed.