India has decided to extend its under-utilized USD 1 billion credit line to Sri Lanka for another year with an aim to help Sri Lanka overcome its severe economic crisis.
This credit facility, which was initially signed in March last year, will enable Sri Lanka to purchase essential items like food, medicine, and other necessities. The extension until March 2024 was in direct response to a request from the Sri Lankan government and is part of India’s comprehensive assistance package of $4 billion that they provided to Sri Lanka in 2022.
India’s decision to extend this support is aligned with its ‘Neighbourhood First’ policy, showcasing their commitment to stand by the government and people of Sri Lanka during their economic recovery.
Last year, Sri Lanka went through an unprecedented financial crisis, marking the worst economic downturn since gaining independence in 1948. The dire shortage of foreign exchange reserves triggered political turmoil and led to the removal of the influential Rajapaksa family from power. But with India’s extended support, there’s hope for a better economic future for Sri Lanka.
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