India foreign minister visits Sri Lanka with stronger ties, China in focus
- India has told global lender IMF that it strongly supports Sri Lanka’s debt restructuring plan, with Colombo owing around US$1 billion to its nearest neighbour
- Sri Lanka requires the backing of China and India for agreement on the loan that’s essential to help it emerge from its worst financial crisis in seven decades
India’s foreign minister arrives in Colombo on Thursday following his country’s backing of Sri Lanka for a US$2.9 billion International Monetary Fund (IMF) loan, leaving China as the island’s last remaining major creditor which has yet to agree to the debt restructuring plan.
India has told global lender IMF that it strongly supports Sri Lanka’s debt restructuring plan, with Colombo owing around US$1 billion to its nearest neighbour.
But Sri Lanka requires the backing of both China and India – its biggest bilateral lenders – to reach a final agreement with the IMF on the loan that is essential to help the country of nearly 22 million people emerge from its worst financial crisis in seven decades.
During his two-day visit, his third to Sri Lanka since 2021, minister Subrahmanyam Jaishankar will look to strengthen India’s ties with its debt-ridden neighbour and sign several key deals.
The two countries are also expected to sign a Memorandum of Understanding for a renewable power project covering three islands in Sri Lanka’s north during Jaishankar’s visit, two sources at Sri Lanka’s power and energy ministry said.
The project stoked controversy last year as it was initially awarded to a Chinese company before India stepped in to secure them.