India says China must be treated as equal creditor when restructuring Sri Lanka debt

Finance Minister Nirmala Sitharaman said she told the IMF and World Bank that ‘all creditors must be treated equally and with transparency’

Her comments came as Premier Li Keqiang said Beijing was ready to provide ‘urgently needed help’ to Colombo to tide over the worsening economic crisis

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Buddhist monks take part in a protest against Sri Lanka’s President Gotabaya Rajapaksa in Colombo. Photo: Reuters

Published: 2:06pm, 23 Apr 2022Updated: 2:09pm, 23 Apr 2022

China must be treated just like any other creditor once talks begin to restructure Sri Lanka’s debt, India’s Finance Minister Nirmala Sitharaman said she told the International Monetary Fund and World Bank.

“All creditors must be treated equally and with transparency,” Sitharaman said in an interview in Washington on Friday. “I’ve emphasised that point in general and in the context of Sri Lanka.”

Sri Lanka was looking to borrow US$1 billion from Beijing so that it can repay existing Chinese loans due in July, as well as a US$1.5 billion credit line to purchase goods. The South Asian nation, which is running out of dollars to pay for imports, is also seeking aid from neighbour India, the World Bank and the IMF.

Sitharaman said she has also requested the IMF consider rapid aid for middle income-classified Sri Lanka – typically given only to low-income countries – as the pandemic has destroyed the island’s tourism revenue.

Meanwhile, China on Friday told Sri Lanka it is ready to provide “urgently needed help”.