Sri Lanka Economic Crisis: Foreign Secretary Vinay Kwatra Meets President Gotabaya Rajapaksa, Holds Talks

The Indian delegation is scheduled to meet Sri Lanka PM Ranil Wickremesinghe and also have talks with President Gotabaya Rajapaksa and other senior officials.

India has extended $4 billion worth of emergency assistance to Sri Lanka since January 2022.

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Foreign Secretary Vinay Kwatra met Sri Lanka's President Gotabaya Rajapaksa and held talks on the current economic situation of the island nation and India’s ongoing support. Foreign Secretary is also scheduled to meet Sri Lankan Prime Minister Ranil Wickremesinghe and have talks with other senior officials.

The Foreign Secretary, along with three other senior Indian government officials, reached Sri Lanka Thursday to assess the country's unprecedented economic crisis.

According to officials in the Indian High Commission, the delegation headed by Foreign Secretary Kwatra also comprises Chief Economic Advisor Dr V Anantha Nageswaran; Secretary, Department of Economic Affairs, Ajay Seth; and Additional Secretary, External Affairs, Karthik Pandey.

Speaking in Parliament Wednesday, Wickremesinghe had mentioned the impending visit of the Indian delegation even as he said New Delhi had stretched its maximum so far by extending $4 billion worth of emergency assistance since January 2022.

In its worst economic crisis since independence in 1948, the island nation is facing an acute shortage of essential items such as food, medicine, cooking gas and fuel. The severe shortages have led to shops witnessing serpentine queues even for bare essentials.

IMF Team Also In Colombo

Wickremesinghe told Parliament the assistance that came from India was not a charity, and that Sri Lanka must devise ways to pay back. According to the PTI report, he is banking on extended credit lines for further fuel purchases.

The Indian delegation's visit coincides with that of a delegation from the International Monetary Fund (IMF) the Lankan leadership is in talks for a proposed staff-level agreement that could lead to a possible bailout.

Nearing bankruptcy, the country's total foreign debt stands at $51 billion. In April this year, Sri Lanka announced that it is suspending repayment of nearly $7 billion in foreign debt due for this year, out of the total of about $25 billion due through 2026.

Quoting a local official, the PTI report said Sri Lanka’s main need right now is to secure bridging finance until the IMF facility becomes a reality. The official said India would continue to be a key partner in this endeavour.