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India-Sri Lanka Economic Partnership Vision Document
News: Recently, The President of Sri Lanka Mr. Ranil Wickremesinghe was on an official visit to India.
• A vision document to deepen economic partnership was adopted.
• India's support of nearly $4 billion between January and July last year was critical for Sri Lanka after it almost ran out of dollars and sank into a financial crisis that left it struggling to fund essential imports including fuel and medicine.
What is the Vision Document about?
• The vision document has been called ‘Promoting Connectivity, Catalysing Prosperity: India-Sri Lanka Economic Partnership Vision’.
• It aims to strengthen bilateral and economic partnership between India and Sri Lanka.
• The document is based on five pillars - maritime connectivity; air connectivity; energy and power connectivity; trade, economic and financial connectivity and people-to-people connectivity.
What are key features of the 5 Pillars?
• At present, there’s only one flight a day between Chennai and the northern Lankan city of Jaffna.
• The two countries agreed to expand this flight to Colombo as well as explore connectivity between Chennai and Trincomalee, Batticaloa and other destinations in Sri Lanka.
Energy and power connectivity
• The two countries have plans to establish a high-capacity power grid interconnection. This is to enable bidirectional electricity trade between Sri Lanka and other regional countries, including those of the BBIN (Bangladesh, Bhutan, India, Nepal) initiative.
• The document also talks of expediting implementation of understanding reached on the Sampur Solar power project and LNG infrastructure and exploring cooperation in Green Hydrogen and Green Ammonia.
• The two countries will also be working on a multi-product petroleum pipeline from India’s South to Sri Lanka.
• They will also undertake a mutually agreed joint exploration and production of hydrocarbons in Sri Lanka’s offshore basins to develop Sri Lanka’s upstream petroleum sector.
• The document outlines cooperation in development of ports and logistics at Colombo, Trincomalee and Kankesanthurai, with an aim to consolidate regional logistics and shipping.
• It also talks of resumption of passenger ferry services between Nagapattinam in India and Kankesanthurai in Sri Lanka besides working towards early resumption of ferry services between Rameswaram and Talaimannar.
• The two countries have planned to promote awareness and popularize India’s Buddhist circuit, and Ramayana trail as well as ancient places of Buddhist, Hindu and other religious worship in Sri Lanka for enhancing tourism.
Trade, economic and financial connectivity
• Both nations have decided to designate Indian Rupee as currency for trade settlements between the two countries.
• Both sides also agreed to operationalise UPI-based digital payments for further enhancing trade and transactions between businesses and common people.
• Sri Lanka being an island nation within Indian ocean is an important strategic partner. India has offered necessary aid during Sri Lanka’s economic crisis and forms crucial part of our Neighborhood first policy.