India-Sri Lanka relations

India-Sri Lanka relations
 

News: Recently, The President of Sri Lanka announced that the country had cleared the last hurdles to be approved for a $2.9 billion bailout from the IMF.
 

Background:
 The island nation has been reeling under Economic, Foreign exchange and Humanitarian crisis for over a year now. In this context, New Delhi’s role in helping Colombo is crucial.
 

How IMF bailout will help Sri Lanka?
 It will establish confidence in Lankan economy and bring credit worthiness to its financial system.
 A lot of other agencies like the World Bank, AIIB, and ADB, have lined up funds to come in.
 Debt will become sustainable as access to capital will be easier which will eventually help stabilize economy in the long run.
 

How has India helped Sri Lanka?
 India’s support to the island nation has been unconditional and in alignment with its goal of Neighborhood first.
 Till date, lines of credit worth over USD 4 billion have been extended to Sri Lanka in diverse sectors including supply of essential items, petroleum, fertilisers, development of railways, infrastructure, defence sector and renewable energy.
 India announced a 1 billion USD line of credit to Sri Lanka last year as part of its financial assistance to help the country deal with its economic crisis.
 India as a creditor nation has also vouched for Sri Lanka to receive bailout package from the IMF.
 Sri Lanka has used over USD 10 million from India's assistance of USD 1 billion to print nearly half of the textbooks for its four million young students. (Quote such examples in your answers)
 Alternatively, India has called for increasing support to Sri Lanka at G20 meetings and BIMSTEC.
 

How has Sri Lanka responded?
 “India had really come to our rescue, India had provided us with a lifeline which allowed us to stay afloat during a very difficult time,” Minister of Foreign Affairs of Sri Lanka.
 In a speech on Women’s day, Sri Lankan President thanked 3 women – Nirmala Sitharaman, Janet Yellen, and Kristalina Georgieva for helping Sri Lanka.
 Sri Lanka is looking for more investments from India in IT, pharmaceuticals, the energy sector, education, etc.
 

Way Forward
 Sri Lankan crisis and reversal is a good example for the region – it is about being more sensitive to a neighbor’s needs rather than outspending rivals.