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New Delhi: India announced a $1 billion line of credit to Sri Lanka on Thursday as part of its financial assistance to help the island nation deal with its economic crisis.
After an agreement to extend the line of credit was inked, Ministry of External Affairs (MEA) spokesperson Arindam Bagchi said India has always stood with the people of Sri Lanka and will continue to extend all possible support to the country.
At a weekly media briefing, he said the assistance will be used for importing food, medicines and other essential items.
“India has always stood with the people of Sri Lanka and we will continue to extend all possible support at this juncture. I think we are cognizant of the economic difficulties the country is facing,” Bagchi said.
Visiting Sri Lankan finance minister Basil Rajapaksa witnessed the signing of the agreement for the $1 billion line of credit being extended through the State Bank of India (SBI).
The signing ceremony was held at the Ministry of Finance in the presence of Rajapaksa, external affairs minister S. Jaishankar and finance minister Nirmala Sitharaman.
Last month, India extended a $500 million line of credit to Sri Lanka to help it purchase petroleum products as the island nation has been reeling under a severe foreign exchange and energy crisis.
“The $1 billion loan facility, which formed the key component of the four-pillar economic cooperation arrangement agreed between India and Sri Lanka during Minister Rajapaksa’s visit to New Delhi in December last year, was extended to the government of Sri Lanka for procurement of food, medicines and other essential items,” the Sri Lankan high commission said in a statement.
Prior to the signing ceremony, Rajapaksa was received jointly by Sitharaman and Jaishankar for bilateral talks, it added.
“During the bilateral talks, the two sides agreed to set up a framework for short, medium and long-term economic cooperation between the two countries aimed at addressing Sri Lanka’s present economic challenges,” the high commission said.
Earlier in the day, Rajapaksa met minister of power and new and renewable energy Raj Kumar Singh and discussed ways and means to further deepen and broaden bilateral cooperation in the power and renewable energy sector.