Sri Lanka is facing its most painful downturn since its independence from Great Britain in 1948. The Island is facing the worst economic crisis which gets worse as India is facing hurdles in giving aid. The shortage of food, fuel, and blackouts with record inflation is making life worst for Sri Lankans.
India extended help of $1 billion, and the release of around 1500 food containers to Sri Lanka is in peril as some of the shippers are not willing to accept payment in Indian Rupees. Sri Lankan finance minister in his visit to Delhi, India clinches a $1 billion line of credits help to tackle the ongoing economic crisis in the country’s energy sector. Ministry of External Affairs (MEA) spokesperson Mr.Arindam Bagchi said after the agreement was signed that India has always stood with its neighbor Srilanka and will continue to extend all possible support to the people of SriLanka.
There are no special conditions for the line of credit and no special conditions for the repayment of the credit line in three years, said Rajapaksa. He said that the local imports are free to import goods from India under the loan facility with the local trade ministry employing a transparent process to facilitate importers. Indian traders have started loading 40,000 tonnes of rice to send to Sri Lanka as part of the line of credit. The reserve bank of India has also extended a currency swap of $400 million and deferred payments owed by the Central Bank of Sri Lanka under the Asian Clearance Union worth several hundred million dollars.
Sri Lanka purchased 40,000 metric tonnes of diesel and petrol from India’s major Indian Oil Corporation to meet the urgent energy requirements. the line of credit comes a month later after the purchase. The current situation in Sri Lanka is that long queues are prevailing for fuel, gas, and other essentials as the shipments dried due to the forex shortage.
After the agreement was signed Trade Minister Bandula Gunawardana gave instructions for the release of cargo under the credit line. Shippers are demanding payments in US dollars rather than Indian rupees due to which some items are getting stuck at the port. The spokesperson of the treader association says that much of the paperwork for suppliers which includes the Indian High commission’s approval too is waiting. He further added that they are facing problems in the release of items stuck at the port.
The parliamentary majority was lost by the Sri Lankan president on Tuesday as former allies urged his resignation followed by days of protest on the streets of the island over the crippling economic crisis.