India extends financial aid worth USD 3.9 billion to Sri Lanka amid economic crisis

India gave aid worth USD 3.9 billion to help Sri Lanka sustain itself in the face of a severe economic and financial crisis and satisfy its urgent requirements such as medications, cooking gas, oil, and food goods.

In February 2022, India signed an arrangement for the delivery of petroleum products worth USD 500 million from the Indian Oil Company via a credit line to assist Sri Lanka in overcoming its fuel shortfall.

In April 2022, this was increased by USD 200 million in petroleum products.

For the import of critical goods, India's EXIM bank and the State Bank of India offered export credit facilities totaling USD 1,500 million to Sri Lanka. India also reached a USD 400 million arrangement with Sri Lanka to assist in the preservation of the country's foreign reserves.

According to Sri Lanka-based publication News 19, Sri Lanka has been granted a USD 1 billion credit line for critical items, a USD 500 million credit line for petroleum, and a USD 55 million credit line for fertiliser.

India has been contributing to Sri Lanka as a gesture of goodwill and humanitarian support. The Indian government will provide the Sri Lankan Transport Department with a fleet of 500 buses. India's High Commissioner to Sri Lanka, Gopal Bagalay, handed over 75 buses to Sri Lanka.

According to the reports, India's assistance to Sri Lanka is consistent with the country's 'Neighborhood First' policy, which prioritizes the security and prosperity of its neighbours.

Sri Lankan President Ranil Wickremesinghe has stated that while the country enters the New Year with baggage from 2022, 2023 would be a vital year for the country to turn around its crisis-stricken economy.