India says ‘ready to help Sri Lanka achieve rapid economic recovery’ | Business & Economic News

India’s foreign minister said New Delhi would support the crisis-hit island on top of a pledged $4 billion in loans, swaps and aid.

A senior Indian official held talks with Sri Lanka’s president and prime minister as India said it was willing to go beyond the $4 billion in loans, swaps and aid it has offered its cash-strapped neighbor.

Sri Lanka is facing its worst economic crisis in seven decades, with severe foreign exchange shortages hampering imports of essential goods such as food, fuel and medicines.

The island nation at the southeastern tip of India needs about $5 billion over the next six months to pay for basic necessities for its 22 million people in long queues, growing shortage and power outages.

Indian Foreign Minister Vinay Kwatra, accompanied by finance ministry officials, was in the commercial capital Colombo with President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe, officials said on Thursday. Talks were held.

“Stressing India’s readiness to help Sri Lanka achieve a rapid economic recovery by promoting investment, connectivity and strengthening economic ties,” Indian Foreign Ministry spokesman Alindan Budge tweeted.

An official in the prime minister’s office said the Indian team had a separate meeting with the central bank governor and finance ministry official Wickremesinghe.

“The delegation will also hold discussions with senior officials on the country’s economic situation and short- and long-term assistance needs,” Sri Lanka’s foreign ministry said in a statement.

India has been Sri Lanka’s main source of foreign aid this year, providing more than $4 billion in aid, Wickremesinghe told parliament this week.

Neighboring countries are also negotiating additional support, including a $500 million fuel credit line, as well as fertilizer and rice imports to help Sri Lanka try to avert a food crisis, officials said.

Sri Lanka plans to hold a donor meeting with China, India and Japan as it continue the talks Reached a rescue package of about $3 billion with the International Monetary Fund.

A severe shortage of foreign exchange and runaway inflation have made life miserable for the South Asian country’s 22 million people.

Vehicles line up to refuel during Colombo’s economic crisis [File: Dinuka Liyanawatte/Reuters]

Economy ‘already collapsed’: PM

Meanwhile, Sri Lanka’s parliament cancelled the remainder of this week’s session to save fuel, officials said on Thursday, as a disastrous economic crisis quickly drained the island nation’s already scarce oil supplies.

Council officials said after authorities closed schools and some State organs For the same reason.

Wickremesinghe told parliament on Wednesday that the country’s economy had “collapsed” and that it was facing “more serious conditions than shortages alone”, as he warned that “it could hit rock bottom”.

“Our economy has completely collapsed,” he said. “Apart from shortages of fuel, gas, electricity and food, we are now facing a much more serious situation.”

Energy Minister Kanchana Wijesekera said deliveries of gasoline scheduled for Thursday had been delayed and urged motorists to travel less.

“Today and tomorrow, only a limited amount of petrol will be distributed to the pumping stations,” he told reporters in Colombo, where motorists have been lining up for days to fill up their tanks.

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