India strengthens ties with Sri Lanka through multi-million-dollar aid and projects

India’s External Affairs Minister, S Jaishankar, visited Colombo shortly after Sri Lanka’s new government took office, extending fiscal assistance to President Anura Dissanayake’s administration. The Sri Lankan President emphasised India’s crucial economic support in achieving his vision for a prosperous nation.

Jaishankar met with key officials, including Prime Minister Harini Amarasuriya, Foreign Minister Vijitha Herath, former President Ranil Wickremesinghe, and Leader of SJB, Sajith Premadasa.

Discussions were centered on modernising the Kankesanthurai port with a $61.5 million grant and converting $20 million in completed Line of Credit projects into grants. India also decided to gift 22 diesel locomotives to Sri Lankan Railways.

Jaishankar also mentioned fuel and LNG supply, solar electrification of religious places, digital public infrastructure, health, and dairy development. On ethnic reconciliation, he reiterated India’s support for equality, justice, and dignity among all communities, including Tamils.

India has played a vital role in Sri Lanka’s economic recovery, providing $3.8 billion in assistance through multiple credit lines after Sri Lanka defaulted on its foreign debt in 2022. This aid surpassed the International Monetary Fund’s 48-month bailout of $3 billion.

Sri Lanka’s economic struggles are compounded by its significant debt to China, totalling over $46.9 billion, more than half of its foreign debt. China’s 99-year lease of Hambantota port in 2017 has led to a debt trap, with Sri Lanka struggling to manage economic liabilities from infrastructural projects.