Sri Lanka secures $1B credit facility from India amid economic crisis

By Shuriah Niazi

NEW DELHI (AA) - Sri Lanka on Thursday secured a $1 billion credit line from neighboring India as part of efforts to overcome its worst economic crisis in history.

The agreement, which covers essentials such as food and medicines, was signed between the State Bank of India and the Sri Lankan government during Finance Minister Basil Rajapaksa’s two-day visit to New Delhi.

Rajapaksa met his counterpart Nirmala Sitharaman and Indian Foreign Minister S. Jaishankar on Thursday, a day after calling on Prime Minister Narendra Modi.

“Neighborhood first. India stands with Sri Lanka. $1 billion credit line signed for supply of essential commodities. Key element of the package of support extended by India,” Jaishankar said on Twitter.

During his meeting with Modi, Rajapaksa briefed the Indian leader “on initiatives being taken by both countries to increase bilateral economic cooperation, and conveyed his thanks for the support extended by India for the Sri Lankan economy,” the Indian Foreign Ministry said in a statement.

Modi “spoke about the central role that Sri Lanka occupies in India’s ‘Neighborhood First’ policy and its S.A.G.A.R (Security and Growth for all in the Region) doctrine,” it added.

Struggling to stave off the crippling economic crisis, Sri Lankan President Gotabaya Rajapaksa said on Wednesday that the government was in talks with international agencies, including the International Monetary Fund.

The announcement marked a shift in policy for Rajapaksa’s government, which had been refusing to turn to international institutions for assistance.

However, the government has changed tack amid growing unrest in Sri Lanka over the economic crunch and severe shortages of essential items, including cooking gas, fuel, and medicines.

The country’s main opposition party organized a protest near the Parliament on Tuesday, calling for Rajapaksa to step down.