India will continue to assist Sri Lanka that is in the midst of its worst economic crisis to recover from the difficulties in line with its ‘Neighbourhood First’ policy, the Indian government said on Thursday.
India’s Ministry of External Affairs (MEA) spokesperson Arindam Bagchi said Sri Lanka is a neighbour and close friend and the Indian government is closely watching the developments in the island nation.
While India in January facilitated a $400 million currency swap with Sri Lanka and deferred $500 million that was due for settlement to the Asian Clearing Union (ACU), it could also increase foreign direct investment and ODA to Sri Lanka.
After China, India is a major FDI contributor in Sri Lanka, investing $1.7 billion from 2005 to 2019 in the areas of oil and gas, tourism, real estate, and financial services.
According to the High Commission of India, the government has committed $2.6 billion to Sri Lanka, of which $436 million came in the form of grant assistance and $2.17 billion as lines of credit.
Indian assistance has been focused on capacity-building, human resources development, and infrastructure development. Additional ODA could be viewed in the context of near-term humanitarian assistance, agricultural development, and financial management.
There have been evolving economic situations as well as other developments in Sri Lanka. In order to help mitigate the economic situation, we have extended assistance worth $ 2.5 billion in the past two to three months which includes credit facilities for fuel and food,” Bagchi said, while replying to a question regarding current developments in Sri Lanka.
Referring to India’s overall ties with Sri Lanka, he said the relationship is rooted in shared civilisational values and aspirations of the two peoples.
“Our cooperation, based on commonality and interests, has been strengthened in recent months. We see the recent developments in this perspective and stand ready to continue working with Sri Lanka for rapid post-Covid economic recovery in line with India’s ‘Neighbourhood First’ policy,” Bagchi said.
“As a neighbour and close friend, India has been keenly following the evolving economic situation and other developments in Sri Lanka,” he added.
Sri Lanka is witnessing massive protests over its worsening economic situation, being said to be the worst in decades. People have taken to the streets to protest over the shortage of fuel and other essentials.
Amid growing public outrage, many cabinet ministers quit the government a few days ago and left Gotabaya Rajapaksa-led government in minority. He has, however, rejected demands for his resignation.
The crisis has stretched the ability of policymakers to pay for essential public services as the treasuries have been drained. Coupled with a severe shortage of foreign currency, vital to the payment of tremendous amounts of Chinese-funded debt, the government had little choice but to ban critical imports leaving many with a shortage of everyday essential items.
Indian aid for Sri Lanka continues with ‘neighbourhood first’ policy
Foreign Affairs Ministry concerned on US Travel Advisory
The Ministry of Foreign Affairs notes that attention has been focused on the revision of the U.S. Travel Advisory on Sri Lanka as at 6 April 2022.
The Ministry recalls that since June 2021, with the COVID-19 pandemic, the U.S. Travel Advisory for Sri Lanka has remained at Level 3, and as such has not been newly introduced in the latest revision. In addition, the language related to ‘terrorism’ was introduced following the Easter Sunday attacks and has stayed consistent since April 2019. It is understood that the reference to terrorism in the U.S. Travel Advisory is based on standard language included in U.S. Travel Advisories around the world where a risk of terrorism exists or has existed, and as such is not specific to Sri Lanka. The Ministry also understands that currently a U.S. Travel Advisory at Level 4 is applicable to many countries, whereas Sri Lanka is at Level 3.
The tourism industry in Sri Lanka is gradually emerging from the effects of the COVID-19 pandemic and as at 29 March 2022, tourist arrivals to the country stood at 280,026. The Ministry of Foreign Affairs wishes to reiterate that the country remains safe and open for tourists. Sri Lanka continues to welcome travellers to the country and remains committed to provide all visitors with the utmost care and service. The recent peaceful protests have not targeted tourists or tourist destinations. All visitors to the country may travel freely throughout the country and all tourist destinations remain open. It is noteworthy that CNN’s “where to travel in 2022” had featured Colombo in their travel list.
Ministry of Foreign Affairs
Colombo
08 April, 2022
Anti-government protest continues despite bad weather (VIDEO)
The public protest demanding the stepping down of the President and the Government continues as of this moment in Colombo despite the occasional showers.
Attended by a massive crowd, the anti-government protest is being held in a peaceful manner and is expected to continue tomorrow.
MIAP
Public Protest at Galle Face (PHOTOS)
The public protest at the Galle Face demanding the stepping down of the President and the Government since this (09) morning will continue for 48-hours straight.
The protest was attended by anti-government demonstrators in many parts of the country and these demonstrators also marched to the Presidential Secretariat in continuity of the demonstrations.
MIAP
All banks open on April 11 and 12
All licenced banks will be open on April 11 and 12 for customers despite the two dates being declared as public holidays, the Central Bank of Sri Lanka (CBSL) said in a statement.
The CBSL has instructed to operate the banks on these two days despite the holidays.
MIAP
Public protest grows in front of Presidential Secretariat (VIDEO)
Anti-government protestors have gathered in large numbers outside the Presidential Secretariat Colombo despite heavy security in the premises.
These demonstrators demanding the stepping down of the President and the government.
MIAP
Galle Face overflowed with anti-government protesters (PHOTOS)
Anti-government protesters from many parts of the country are swarming throughout the Galle Face Green in astronomical numbers demanding the stepping down of President Gotabaya Rajapaksa and the Government since this (09) morning. The protest is expected to last 48 hours straight unless intercepted first.
These demonstrators are demanding that the President and the Government shall be stepping down from their positions immediately. The protest is endorsed by people of all social statuses including but not limited to artists, trade union leaders, people of professions, and the youth community.
MIAP
Public Protest 2022: Protesters swarm in thousands at Galle Face
Protesters from many parts of the country are swarming in thousands at Galle Face, Colombo demanding the stepping down of President Rajapaska and the Government.
Some demonstrators are joining on protests on both sides of the road near the Shangri-La Hotel.
These demonstrators are swarming throughout the Galle Face ground since around 8 am this morning and are expected to grow by the evening.
MIAP
Enough with the destruction. Leave. Hand the country over to someone who can rule: Cardinal
His Eminence Malcolm Cardinal Ranjith the Archbishop of Colombo joining a protest held in Negombo this (09) morning told media that every citizen should be encouraged to demonstrate their objection to remove the corrupt regime of the country.
“This situation cannot be allowed to continue. We urge every citizen of this country to unite to change this system. Let us get together and tell them to go now, enough with the destruction. Go now. Hand it over to someone who can rule. May everyone have the courage to continue this struggle throughout Sri Lanka and take to the streets to eradicate this corrupt system,” the Cardinal said.
MIAP
Sri Lankan economic crisis may provide opportunities for Indian tea exporters
The regular power cuts and non- availability of sufficient quantities of fuel to operate generators have also hampered the day to day operation of tea export companies. The exporters of value added tea have been affected more than others as the tea packing machines that normally operates on 2-3 shifts per day are unable to function even on a single shift without any interruption due to the power cuts. The brand owners face a huge challenge in fulfilling their contractual obligations to the foreign buyers. The exporters are unable to plan the production due to long power cuts. The end result would be low export volume and revenue from tea sector during year 2022. The association has sought the assistance of Sri Lanka Tea Board to obtain the fuel requirements for tea exporters but CEPETCO has not been able to supply the required quantities. The fuel issue also affects the tea manufacturers and transport of tea to Colombo for the auction. The escalation of transport cost along with high auction prices negatively impact on the competitiveness of Ceylon Tea in the global market. It is necessary to provide fuel to the export industries on priority basis in order to ensure the continuous foreign exchange earnings that are vital to the country at the moment.
The Sri Lankan tea exporters who are grappling with a number of internal and external issues such as low tea crop, high COP, fuel issue, sanctions on Russia, high freight rates etc are concerned of the possible loss of market share for Ceylon Tea if the corrective measures are not taken immediately.
Since November last year the domestic tea crop has been declining largely due to the non- application of fertilizer on time and also due to adverse weather conditions prevailed in the tea growing regions during the last few months. In the first two months of 2022 Sri Lanka registered a tea crop of 41 million kg as against 45.7 million kg registered in the same period last year, a decline of 4.7 million kg. As per the tea quantities offered at the Colombo tea auction during the month of March 2022, it is estimated that the tea crop in the first quarter would be in the range of 65 million kg, a drop of about 10% compared to last year. Although tea cropping months have begun with the onset of rain, the fertilizer is adequately not available for the tea growers. Further, the price of fertilizer has gone up by three to four folds making it unaffordable to many tea producers. Since tea export volumes are directly related to available tea crop, the tea export volume is also estimated to be lower by about 8-10% in the first quarter of the year. The exporters are worried about losing Ceylon tea market share to other competitors and also losing valuable foreign exchange earnings.
The value added tea export sector is also affected from shortage of tea packaging materials. The suppliers of tea packaging materials who depend on imported raw materials are unable to secure the required quantities due to shortage of dollars. They do not get priority from Banks when LC is opened for import of materials. The prices of packaging materials too have gone up with the dollar shortage. A similar situation is seen in the supply of tea flavours and other inputs for value addition of Ceylon Tea. These factories too suffer from power cuts and shortage of fuel.
At present, the Colombo tea auction prices have gone up to record levels due to the depreciation of the local currency and non – availability of sufficient quantities. The situation has temporarily mitigated the adverse impact of sanctions on Russia on Colombo tea auction prices. Sri Lanka used to export about 28-30 million kg of tea to Russia and another 4 million kg tea to Ukraine annually. Though there are no sanctions on Ukraine, export of tea to this country has been affected due to disruptions to the shipping and other logistic arrangements. The infrastructure in most parts of Ukraine has been damaged and therefore the retail businesses will not be able to resume the operations soon. The US/EU sanctions on Russia, depreciation of the Ruble, curtail of shipping movements etc have affected Sri Lanka tea exports to this important market. As per available media reports, India and Russia have agreed to carry out their trading business using the Rupee & Ruble. This will enable the Indian tea exporters to continue to supply tea to the Russian market at the expense of Sri Lanka and some other suppliers. China and Vietnam who do not accept US & EU sanctions on Russia will also continue with their tea supplies to the Russian market. Tea Exporters Association (TEA) has suggested to Sri Lanka Tea Board to explore the possibility of having a mutual trading arrangement with Russia but Sri Lanka is yet to initiate any dialogue with Russia on this matter. Since the Russian sanctions may get dragged on for some time, the absence of any acceptable solution to the issue could affect the Ceylon tea share in the Russian market at least in the short to medium terms.
Tea Exporters continue to face difficulties in getting the empty containers for supply of tea. The freight rates have further escalated with sanctions on Russia affecting the pricing of Ceylon Tea. The high COP and the tea auction prices combined with other internal & external factors may adversely affect Sri Lanka tea exports not only to Russia but to other destinations as well.
Some foreign buyers are inquiring about the uninterrupted supply of Ceylon Tea under the current situation in the country. Tea Exporters Association ( TEA ) members are committed to increase the volume of export of tea and foreign exchange earnings and request the responsible state agencies to address the prevailing issues without delay as they could seriously affect the sustainability of the tea industry. The government may also explore the possibility of having a special trading arrangement with Russia to safeguard the important Russian market for Ceylon Tea. It is a matter of time that Colombo tea auction experiences the heat of Russian sanctions.
Tea Exporters Association