India’s Exim Bank To Foster Partnership With Sri Lanka Amidst Struggle With China 
Posted 16,December

By Chaveendra Dunuwille

In Local News

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Following the 26-year Civil War in Sri Lanka, China has become the nation’s leading lender and has established close relations with the current and previous regimes headed by brothers Gotabaya & Mahinda Rajapakse, respectively. As Sri Lanka currently faces an ever-worsening forex crisis, India’s Exim Bank is discussing the possible funding of future investment projects. 

As a regional power, establishing good relationships with its neighbors has always been a critical part of India’s foreign policy, considering its ongoing struggle for dominance in the region with China. Despite Prime Minister Mahinda Rajapakse’s decision to cancel the $500 million East Container Terminal, India has seemed to increase its interactions with Sri Lanka. 

Last week, a three-person team from Exim Bank visited Sri Lanka to discuss the potential funding of future infrastructure development projects. The visit came days after India pledged a $400 million currency swap and a $1 billion import loan for food, drugs, and essential items. Furthermore, India agreed to $500 million in fuel credit following Finance Minister Basil Rajapakse’s visit to New Dehli. 

Exim Bank has already channeled $441.42 million for four water supply projects headed by the National Water Supply & Drainage Board. The bank also agreed to invest in the Trincomalee Oil Tank Farm, where Sri Lanka owns 99 large oil storage tanks. These investments come when Sri Lanka’s official foreign currency reserves have plummeted to $1.6 billion, the lowest in over a decade.