India is the first nation to provide a letter of support to the International Monetary Fund to support the reconstruction and debt restructuring of Sri Lanka. This gesture from India is a sign of their country’s continued support to their neighbouring island nation in their economic recovery. India has provided their neighbouring nation $4.5 Billion to assist them in overcoming the situation.
It is worth a mention that China extended the same gesture of aid towards Sri Lanka on Friday, January 20, 2023. India, on the other hand, handed over its letter of support on Monday, January 16. It is also worth mentioning that the handover took place four days before India’s Minister of External Affairs, S Jaishankar, visited Colombo to interact with the political leadership of Sri Lanka.
During the trip, Minister of External Affairs S Jaishankar assured the leadership of Sri Lanka that India is standing firmly with their neighbour. He also assured President Ranil Wickremesinghe and other leaders that they are prepared to go the extra mile if the need arises. The politician further noted that his visit to Sri Lanka is a part of Prime Minister Narendra Modi’s commitment to putting the neighbourhood first.
In the letter that India presented to the IMF, they acknowledged the weak financial and economic condition of Sri Lanka. They also talked about the country’s engagement with creditors to restore debt sustainability. The country further committed to extending its support to prospective extended finance facility-supported programs.
Additionally, the government of India reiterated its commitment to support Sri Lanka with financing/debt relief which is consistent with restoring that country’s public debt sustainability under the IMF-supported program. Additionally, the programme will and ensuring that the program is fully financed as projected by the Bretton Woods Institution. The Modi government has communicated that they will provide this financing/debt relief through the Export-Import Bank of India.
