Sri Lankan high commissioner Milinda Moragoda on Tuesday met with union commerce minister Piyush Goyal and union finance minister Nirmala Sitharaman to discuss India’s support for his country’s economic recovery, including through the expansion of bilateral trade and use of the rupee for trade settlement.
India provided economic assistance worth almost $4 billion, including a currency swap and lines of credit for emergency purchases of food, medicines and fuel to Sri Lanka during last year’s unprecedented economic crisis. New Delhi also took the lead in providing guarantees to the International Monetary Fund (IMF) to help Colombo access a $2.9 billion bailout package.
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Moragoda has been meeting key Indian ministers for discussions on Sri Lanka’s economic recovery. During his meeting with Goyal, the two sides focused on a range of issues related to bilateral trade and commerce, particularly aimed at the island country’s economic recovery, the Sri Lankan high commission said in a statement.
In this context, the two sides looked at ways to establish and promote rupee trade as a means of economic recovery in Sri Lanka, mexchanisms for expanding bilateral trade, and the possibility of bilateral integration in the textiles and garment sector, the statement said.
In his meeting with Sitharaman, Moragoda thanked India for the aid being provided to Sri Lanka, particularly the regulations and approvals being put in place to facilitate rupee trade between the two countries. The discussions also focused on ways to utilise available resources in the $1 billion Indian line of credit to import urgently required pharmaceuticals, which are in short supply in Sri Lanka.
Moragoda briefed Sitharaman on Sri Lanka’s discussions with the IMF to obtain the extended fund facility and the current status of his country’s debt restructuring process. While apprising her of the drastic impact of the economic contraction on Sri Lanka’s population, Moragoda expressed appreciation for efforts to garner international support for Colombo’s case, including at the G20.
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During the meetings, Moragoda thanked the Indian side for its “unprecedented support” to Sri Lanka to mitigate the impacts of the economic crisis. Recalling India’s timely issuance of financial assurances to the IMF, the first creditor to do so, Moragoda emphasised the key role that India can play in the recovery phase of Sri Lanka’s economy.
The meetings took place just ahead of the first meeting of the G20 finance ministers, scheduled to be chaired by Sitharaman in Bengaluru during February 24-25.