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India and Sri Lanka held a technical discussion on rescheduling of bilateral debt repayment by Sri Lanka on Wednesday, the Indian High Commission said yesterday, with further rounds of discussions expected in the coming weeks.
The Indian delegation, comprising of senior officials from the Ministry of External Affairs, Ministry of Finance, and EXIM Bank, interacted with representatives from the Department of External Resources of Sri Lanka through a video conference. The constructive discussion between both sides took place in a cordial and positive atmosphere, the High Commission said in a statement.
“The next round of technical discussions between the two sides on rescheduling of debt repayment is expected to be held soon,” it added.
Both sides had discussed the ongoing COVID-19 pandemic and its likely health and economic impacts in the region during Prime Minister Narendra Modi’s telephone conversations with President Gotabaya Rajapaksa on 23 May and Prime Minister Mahinda Rajapaksa on 27 May respectively.
During these conversations, Prime Minister Narendra Modi had assured that India would continue to provide all possible support to Sri Lanka for mitigating the effects of the pandemic.
During the courtesy call to President Rajapaksa by the High Commissioner of India Gopal Baglay on 29 May, it was agreed to accelerate India’s participation in Sri Lanka’s post-COVID economic recovery. High Commissioner Gopal Baglay also reiterated India’s commitment to deepening its partnership with Sri Lanka for peace, prosperity and security of the two peoples during his conversation with the President of Sri Lanka.
Building on the mutual priorities identified during the telephone conversations between the leaders of India and Sri Lanka in May, and the Indian High Commissioner’s courtesy call on the President of Sri Lanka, the High Commission of India engaged with the Government of Sri Lanka to facilitate the initiation of discussions between the two sides on this matter.
The High Commission of India will continue to work towards coordinating and facilitating such engagement as a part of India’s overall commitment to work with Sri Lanka to counter and mitigate the effects of the COVID-19 pandemic.
Deferment of Sri Lanka’s debt repayment to India has been on the cards for a while, but is expected to bring limited relief, as the country’s largest debt payment, as much as 44%, is to international financial markets. However, India and Sri Lanka have been negotiating a $1 billion SWAP arrangement, to bolster reserves and assist Sri Lanka’s debt repayments in 2020.
Sri Lanka has to repay $ 4.6 billion with about $ 3.2 billion still left to pay, according to Central Bank data, including a $ 1 billion bond repayment in October.
