May 15, Colombo (LNW): Sri Lanka has formalised a series of critical agreements with India’s Export-Import Bank (EXIM Bank), marking a major advancement in its ongoing external debt restructuring efforts.
The bilateral arrangements, signed in late March and early April 2025, are aimed at recalibrating the country’s debt obligations in a more sustainable and manageable framework.
The agreements pertain specifically to existing Lines of Credit and Buyer’s Credit Loan Agreements provided by India, with a cumulative value of approximately USD 930.8 million.
These revisions fall within the broader context of Sri Lanka’s coordinated approach to external debt restructuring, a key component of the country’s financial recovery plan following its 2022 economic collapse.
Representing Sri Lanka, K.M. Mahinda Siriwardana, Secretary to the Ministry of Finance, Planning, and Economic Development, signed the agreements. From the Indian side, Nirmit Ved, General Manager of EXIM Bank, and Amith Kumar, Deputy General Manager, signed the documents on behalf of the Lines of Credit and Buyer’s Credit Agreements, respectively.
These amendatory agreements are expected not only to enhance fiscal space for the island nation but also to reinforce the longstanding diplomatic and economic partnership between Colombo and New Delhi.
The collaboration comes at a time when Sri Lanka is still navigating the long road to macroeconomic stability, aided by both multilateral support and bilateral creditors.
India’s role has been especially notable. Alongside France and Japan, India co-chairs the Official Creditor Committee tasked with facilitating Sri Lanka’s debt resolution process.
New Delhi was also amongst the first to offer emergency financial assistance during the peak of the country’s crisis, providing vital fuel, food, and medicine through swift credit lines and grants that helped avert a complete socio-economic breakdown.
The Ministry of Finance in Colombo acknowledged India’s sustained involvement, crediting the country’s leadership and pragmatic engagement for helping Sri Lanka reach key milestones in its recovery.
Officials also noted that the renegotiated terms of credit with India provide a template for future bilateral arrangements and offer a stabilising influence in the broader restructuring landscape.
Whilst much progress has been made, Sri Lanka remains under close watch from international institutions such as the International Monetary Fund (IMF), whose Extended Fund Facility is contingent on successful restructuring outcomes with both bilateral and private creditors.
The latest agreements with India signal a constructive step forward in that regard, potentially paving the way for more favourable terms with other lending nations and bondholders.
