India expects bilateral trade worth $8-9 billion with Russia and Sri Lanka in the next two months after it allowed international trade in rupees, India’s trade secretary B. V. R. Subrahmanyam said.
With increasing assistance from India to abate the Sri Lankan crisis, the new President Ranil Wickremasinghe is keen to enhance bilateral relations.
Traditionally, India–Sri Lanka bilateral relations are centered on a few specific issues and concerns—security concerns (now includes security cooperation), ethnic issues, fishers dispute, and investment climate—each one getting greater focus at specific times and under particular circumstances.
Even as India began extending forex assistance, a section of the political Opposition in Sri Lanka was critical of the Rajapaksa regime for signing high-cost investment agreements , though not all of them named India’s public and private sector entities in this regard.
Likewise, on the fisheries front, through the past months of Indian assistance to a nation facing both economic and political crises, one out-witting the other, on daily-basis Indian fishermen continued to be arrested and their boats and gears impounded on allegations of violating and poaching in Sri Lankan waters.
However, India’s China concerns viz Sri Lanka continue to remain real though through the past years, there is nothing to suggest that Chinese commercial investments had led to any military/security tie-up that New Delhi should be worried about, economic experts said.
Now, after the ascension of the new government, Beijing may have to bend backwards to prove to Sri Lanka and Sri Lankans that it did not desert a ‘friend in need’ in its real hour of economic crisis, they added.
The Reserve Bank of India last month allowed importers and exporters to pay in the partially convertible rupee, a move widely seen as making trade with Russia and South Asian neighbours easier instead of relying on dollars.
“The rupee-denominated sales will be a big, big advantage,” Indian commerce secretary B.V.R. Subrahmanyamsaid adding that he anticipate in the next two months $8-$9 billion of trade with Russia and Sri Lanka.”
India emerged as the top lender to Sri Lanka for the first four months of 2022, extending loans worth $376.9 million.
India is planning to provide further financial assistance to neighbouring country Sri Lanka after providing aid worth $3.8 billion since January this year , official sources said .
The Giant neighbour has come to rescue Sri Lanka which is currently under a severe economic crisis. The island country is facing an acute shortage of foreign currency along with food and fuel crisis.
India also emerged as the first responder under Prime Minister Narendra Modi’s neighbourhood first policy when Sri Lanka was left alone by its so-called benefactors for funding support.
Despite wide expectations, China’s unwillingness or the reluctance to come to the rescue of Sri Lanka when it needed the most raised many eyebrows.
Subrahmanyam said the government was working on new trade deals with countries like the United Kingdom that would boost its exports and offset demand weakness in some of its markets.
He expects India merchandise exports to jump to about $500 billion in the current fiscal year that started on April 1, from about $420 billion in the year-ago period.
