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India begins debt restructuring talks with Sri Lanka

On 16 September India and Sri Lanka held the first round of talks regarding restructuring Sri Lanka’s bilateral official debt to India.

According to Reuters India’s support to Sri Lanka, this year has included a “$400 million currency swap, a $1 billion credit line for essential goods and a $500 million line for fuel.” Additionally “India has also deferred payment on Sri Lankan imports of about $1.2 billion and given a credit line of $55 million for fertilizer imports.”

During the discussion on debt restructuring, India promised that it would be supporting the crisis-hit island primarily through long-term investments.

In early September Sri Lanka reached an agreement with the International Monetary Fund (IMF) for a loan of about USD 2.9 billion. The loan is contingent on the island securing financing assurance from official creditors and negotiations with private creditors.

The High Commission of India in Colombo stated that “the discussions held in a cordial atmosphere symbolize India’s support to early conclusion and approval of a suitable IMF programme for Sri Lanka.”

The Indian High Commission also stated that India will continue to support Colombo “in all possible ways, in particular by promoting long-term investments from India in key economic sectors.”

On 23 September, Sri Lanka will be making a presentation to its international creditors. The presentation will outline Sri Lanka’s plans for debt restructuring.

Read more here and here

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