How India came to the rescue of beleaguered Sri Lanka

Crisis-hit Sri Lanka is reeling from massive debt and has run out of money to pay for food and fuel. Already defaulting on its debt, the island nation has sought help from neighbors India and China and the International Monetary Fund to stay afloat.

After political corruption and the collapse of the machinery of government, angry protesters stormed the Presidential Palace and the Sri Lankan Prime Minister’s official ‘Temple Trees’ residence and refuse to leave. President Gotabaya Rajapaksa has offered to step down amid mounting pressure, but his whereabouts are unclear. Even Prime Minister Ranil Wickremesinghe has announced his willingness to step down if a consensus is reached on the formation of the government.

According to official data, the Sri Lankan currency has collapsed by 80%, making basic commodities expensive and food prices rising by almost 60%. The government currently owes $51 billion.

Foreign Minister S Jaishankar assured Sri Lanka of support during its worst economic crisis, and said India was currently focused on helping the country.

Here is how India has provided support to Sri Lanka:

• India has granted support of 3.8 billion dollars to “ameliorate the serious economic situation in Sri Lanka”. The Foreign Ministry said India was “closely following recent developments in Sri Lanka”.

• A $400 million currency swap with the Reserve Bank of India was extended for three months in April

• India donated 400 metric tonnes of urea under the line of credit to support farmers in the crisis-hit island nation and boost bilateral relations.

• The government handed over a total of 3.3 tonnes of essential medical supplies to Sri Lanka. In line with Prime Minister Narendra Modi’s ‘Neighborhood First’ policy, more than 25 tons of medicines and medical supplies worth SLR 370 million have been donated by the government and people of India to Sri Lanka. About 1,600 tons of rice have been supplied from India so far.

• In addition, 400,000 million tonnes of fuel have been delivered to Sri Lanka through a $500 million credit facility, the Indian High Commission in Colombo said.

• India may provide food and medical aid to Colombo, sources say. New Delhi has assured Colombo of participating in an aid consortium offered by Sri Lanka, India, Japan and China, according to a report published in Money control.

• According to a report published in The footprintIndia has lined up a ‘slew of projects’ to boost trade and connectivity with Sri Lanka, including its oil retail presence in the island nation

How deep is the crisis in Sri Lanka?

People are hungry and many are looking for passports to go abroad. According to the United Nations World Food Programme, nearly 9 in 10 families skip meals while 3 million receive humanitarian aid.

The 2019 Easter bombings, in which nearly 260 people were killed, devastated the tourism sector, which was the main driver of the economy.

The Sri Lankan rupee nosedived to around 360 against the US dollar, making imports expensive and unaffordable. The country has suspended repayment of about $7 billion in foreign loans due this year out of the $25 billion to be repaid by 2026.

With agency contributions

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