The Centre has extended eight Lines of Credit (LOCs) to Sri Lanka amounting to USD 1850.64 million in sectors, including railways, infrastructure, defence, renewable energy, petroleum and fertilizers in the past 10 years.
Under its ‘Neighbourhood First’ policy, the government is committed to developing friendly and mutually beneficial relations with all its neighbours. In line with this policy, India continues to assist Sri Lanka in its economic development and also support it in overcoming its economic challenges, said S. Jaishankar, External Affairs Minister in the Lok Sabha on Friday.
In January , India extended a US$ 400 million currency swap to Sri Lanka under the SAARC Framework and deferred successive Asian Clearing Union (A.C.U.) settlements till July 6. A Line of Credit of US$ 500 million was extended to Sri Lanka for importing fuel from India. In addition, India has extended a credit facility of US$ 1 billion for the procurement of food, medicines and other essential items from India.
Humanitarian assistance was also provided to Sri Lanka by gifting essential medicines worth about Rs 6 crore, 15,000 litres of kerosene oil and US $ 55 million LoC for procurement of urea fertilizer. The Government of Tamil Nadu has contributed rice, milk powder and medicines worth US$ 16 million, as part of the larger Indian assistance effort, said the Parliament reply.
The ministry informed that development assistance under Lines of Credit (LoCs) is extended in accordance with the Indian Development and Economic Assistance Scheme (IDEAS) guidelines of the Government of India. In accordance with these guidelines, the terms of these soft loans are transparent, with low rate of interest, moratorium in principal repayment, long repayment period and in-built flexibility.
In case of the delay in repayment by borrowing from the government, the issue is taken up bilaterally, added the ministry.