By Rezaul H Laskar Courtesy The Hindustan Times

The Indian assistance ranged from supply of LNG for power plants to grants for upgrading railways and a port and the launch of a new ferry service

New Delhi

India on Monday unveiled a slew of measures to boost development and physical and energy connectivity with Sri Lanka, with Prime Minister Narendra Modi assuring President Anura Kumara Dissanayake of continued support for Colombo’s economic stabilisation efforts.

The Indian assistance, ranging from supply of LNG for power plants to grants for upgrading railways and a port and the launch of a new ferry service, were announced following talks between Modi and Dissanayake, who is on his first foreign visit since becoming president in September.

The moves signalled continuity under India’s Neighbourhood First” policy for Sri Lanka, which has been one of the largest beneficiaries of New Delhi’s development cooperation programme. Besides being Sri Lanka’s largest trade partner, India also continues to be the country’s largest source of tourists and biggest source of investments.

We shall work towards establishing electricity grid connectivity and multi-product petroleum pipelines between both nations. The Sampur solar power project shall be accelerated. Additionally, LNG shall be supplied for Sri Lanka’s power plants,” Modi said at a joint media interaction, speaking in Hindi. He added both sides will also work towards finalising a trade deal.

Dissanayake thanked India for its support in stabilising the Sri Lankan economy through unparalleled and multi-pronged” assistance, including emergency financing and foreign exchange support worth $4 billion.

We faced an unprecedented economic crisis some two years ago and India supported us immensely to come out of that quagmire. It has also helped us immensely after that, especially in the debt restructuring process,” Dissanayake said.

A joint statement said the two sides will work together for the timely completion of ongoing India-backed projects, such as Phase III and IV of the Indian Housing Project, the Islands Hybrid Renewable Energy Project, and community development projects. Besides, they will identify new projects for development partnership in line with the priorities of the Sri Lankan government.

In the energy sector, the two sides will continue discussions on supply of LNG from India to Sri Lanka, establishment of a high-capacity power grid interconnection, and trilateral cooperation with the United Arab Emirates (UAE) on building a multi-product pipeline from India to Sri Lanka for supply of affordable and reliable energy. Officials said this proposal envisages technical and economic support from the UAE in constructing the pipeline.

In the context of ongoing cooperation for developing the Trincomalee Tank Farms, Modi and Dissanayake decided to support the development of Trincomalee as a regional energy and industrial hub, the joint statement said.

In the field of connectivity, the two sides expressed satisfaction at the resumption of the passenger ferry service between Nagapattinam and Kankesanthurai and agreed to revive the passenger ferry service between Rameshwaram and Talaimannar. India will also provide a grant of $14.9 million for the signalling system of the Maho-Anuradhapura railway line.

Foreign secretary Vikram Misri told a media briefing that India remains involved in Sri Lanka’s financial stabilisation efforts following the economic crisis of 2022 through its engagement with the International Monetary Fund (IMF) and in its role as co-chair of the Official Creditors’ Committee.

Our support has been timely, swift and, most importantly, unconditional, underlining our position as a responsible and friendly neighbour of Sri Lanka,” Misri said. As part of these efforts, India has converted repayments worth

$20.66 million for seven line of credit projects into a grant. India will also provide a grant of $61.5 million for rehabilitating Sri Lanka’s Kankesanthurai port, a project that was earlier to be done under a line of credit.

Modi also reaffirmed India’s continued support for Sri Lanka’s economic stabilisation efforts, Misri said. He assured President Dissanayake that India’s approach would be investment-based and grant-oriented to reduce the debt burden on Sri Lanka and to assist them in generating economic opportunities that are long-term and sustainable,” he said.

The two sides also signed a protocol amending the agreement for avoidance of double taxation to prevent fiscal evasion with respect to taxes on income, and a memorandum of understanding (MoU) for training 1,500 Sri Lankan civil servants over five years at India’s National Centre for Good Governance. India also announced a financial assistance scheme for 200 students from the University of Jaffna and Eastern University.