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India to continue to support Sri Lanka’s economic recovery

June 27, Colombo (LNW): India says it will continue to support Sri Lanka’s economic recovery including by promoting long-term investments in its key economic sectors.

Following the approval by the IMF for the Extended Fund Facility (EFF Programme) for Sri Lanka on 20 March 2023, the Official Creditors Committee (OCC) was launched on 13 April 2023 to hold talks among Sri Lanka’s bilateral creditors to finalize a plan for restructuring Sri Lanka’s debt.

After several rounds of engagements, the OCC signed the Memorandum of Understanding (MoU) on debt restructuring on 26 June 2024.

“This milestone demonstrates the strong progress made by Sri Lanka in stabilizing its economy and moving towards reform and growth,” the Indian Government said.

As one of the Co-Chairs of the OCC, along with France and Japan, India has been steadfast in its commitment to the stabilization, recovery and growth of the Sri Lankan economy.

“This was also demonstrated by India’s unprecedented financial support of USD 4 billion to Sri Lanka. India was also the first creditor nation to convey financing assurances to IMF which paved the way for Sri Lanka to secure the IMF programme,” the Indian Government said in a statement.

Sri Lanka signed a deal with creditor nations to restructure about US$5.8 billion in bilateral debt, the office of the country’s president said on Wednesday (Jun 26), in a move that would help stabilise its crisis-hit economy.

Officials from the cash-strapped South Asian nation signed the agreement in Paris with the Official Creditor Committee (OCC), which is co-chaired by Japan, India, and France.

Sri Lanka also signed debt treatment agreements in Beijing with China’s Exim Bank, Wednesday, to restructure USD 4.2 billion of debt.

The Framework Agreement related to this was signed between Sri Lanka and China in Colombo, Sri Lanka.

“India was Sri Lanka’s largest trading partner in 2022. Sri Lanka’s exports to India have also grown. The use of Rupees for trade settlement is further helping Sri Lanka’s economy. These are concrete steps to help Sri Lanka’s economic recovery and growth,” the statement noted. India was once again the largest source of tourists for Sri Lanka last year with over 100,000 tourists, it added. “Around one in every five to six tourists in Sri Lanka is an Indian.

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