India swallows Sri Lanka
2022.12.27 07:34
India swallows Sri Lanka
Budrigannews.com – This year, Sri Lanka’s enormous northern neighbor stepped in when the country entered its worst economic crisis in seven decades, which resulted in deadly riots and alarming shortages of fuel, food, and medicine.
Between January and July, India sent a warship carrying essential drugs for the island’s 22 million inhabitants and provided about $4 billion in rapid assistance, including credit lines, a currency swap arrangement, and deferred import payments.
According to a government minister and three sources, India is looking to land ambitious long-term investments in order to counter the influence of regional rival China now that Sri Lanka is close to signing a $2.9 billion loan agreement with the International Monetary Fund (IMF) and its economy is stabilizing.
In an interview this month, Sri Lanka’s Foreign Minister Ali Sabry said, “What we are looking at right now is investment from them.” He was referring to a variety of projects worth more than $1 billion that are currently under discussion and would support India’s presence in Sri Lanka. They are willing to put in whatever it takes.”
Sabry stated, “India is probably strategically looking at that…because of their concerns about their security.”
Reuters inquired about India’s strategies and plans for Sri Lanka but received no response.
At a time when New Delhi and China are having persistent friction along their Himalayan frontier, a source with knowledge of the situation told Reuters that regional security would always be New Delhi’s top priority.
The anonymous source stated, “There are no two ways about security concerns,” citing the sensitive nature of the matter. Investment is the focus when it comes to long-term engagement.”
According to a number of officials, Sri Lanka is interested in working with New Delhi to expand and develop the harbor at Trincomalee in the northeast into a major port in addition to seeking Indian investments to establish renewable energy and power projects in the north of the island.
These projects could help New Delhi balance China’s extensive 15-year-old infrastructure projects in the south of Sri Lanka by taking advantage of the island’s northern location near India.
Sri Lanka’s Tamil-overwhelmed north additionally shares ethnic binds with southern India’s Tamil Nadu state.
The discussions, and the size of Indian guide this year that far surpasses different givers, underline New Delhi’s endeavors to hook back impact in the island found only a couple of miles off its southern tip along occupied streams connecting Asia to Europe.
India’s top diplomat flew into the island nation’s main city of Colombo for meetings at the end of June, a fortnight before tens of thousands of irate Sri Lankans took to the streets and forced President Gotabaya Rajapaksa to flee the country.
Unfamiliar Secretary Vinay Kwatra, who was joined by authorities from India’s money service, met Rajapaksa and State head Ranil Wickremesinghe, among others.
According to a Sri Lankan government source with direct knowledge of the discussions, Kwatra and other Indian officials mentioned China’s position as a major geopolitical concern in their conversations with the leadership of Sri Lanka.
The source, who did not want to be identified because he was not allowed to talk to the media, said that India was the most concerned about China’s large role in the island’s economy, which had grown significantly under previous Rajapaksa administrations.
The June meeting’s specifics have not yet been made public.
Reuters inquired about the June meetings but received no responses from Kwatra or the Indian and Sri Lankan foreign ministries.
The Indian foreign ministry said in a statement shortly after Kwatra’s visit that talks had primarily focused on economic issues, including expanding investments. China was not mentioned at all.
China’s influence in Nepal, Bangladesh, and Sri Lanka, all of which are in New Delhi’s immediate neighborhood, has long been a source of concern. Since Indian and Chinese troops clashed along a remote Himalayan border in 2020, which resulted in the deaths of dozens of soldiers, tensions have increased and diplomatic ties have become strained.
Sabry said, referring to India, “We understand that it is their prerogative to look after their security.” Additionally, in regards to Sri Lanka, we do not wish to contribute to any escalation of tensions between any nations.”
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In the meantime, China has worked with the Sri Lankan government to restructure the country’s debt, which is necessary for the IMF deal to work. It has also delivered rice, fuel, and medicine.
The lending provided by Beijing amounts, according to the World Bank, to approximately $7 billion, or 12% of Sri Lanka’s $63 billion external debt.
In response to written questions from Reuters, the Chinese foreign ministry stated, “We are willing to work with relevant countries and international financial institutions to continue to play a positive role in assisting Sri Lanka.”
The ministry stated that it did not have specific information regarding India’s investment and assistance in Sri Lanka and that its own assistance to the country was “not targeted at third parties.”
After the COVID-19 pandemic destroyed tourism and reduced remittances from citizens working abroad, Sri Lanka entered a financial crisis. The conflict in Ukraine resulted in a sharp rise in import costs, particularly for fuel.
Additionally, Rajapaksa’s administration refused IMF assistance, resulting in a decline in foreign exchange reserves and worsening fuel and medicine shortages.
Tens of thousands of people took to the streets and stormed government buildings, igniting violent protests.
In July, the president left the country and resigned. By that time, Sri Lanka had finally contacted the IMF, and the two parties have since reached a preliminary loan agreement worth $2.9 billion.
However, Sri Lanka was able to buy time thanks to Indian assistance.
According to Uditha Devapriya, chief international relations analyst at Factum, a Colombo-based foreign policy think tank, “Sri Lanka would have unraveled as Lebanon did without India.”
Sri Lanka has clearly benefited from its proximity to the region’s most powerful neighbor. In addition, maintaining stability in India’s backyard is in its best interest.”
In October, Wickremesinghe – who took over as president in July after Rajapaksa quit – disclosed an outline for Trincomalee, which has a characteristic profound water harbor, including a proposition to work with India to foster an essential port there other than setting-up another modern zone and an energy center point, as per subtleties delivered by his office.
Undersea cables to connect the power grids of both India and Sri Lanka and a fuel pipeline from southern India’s mainland to northern Sri Lanka are also under preliminary discussion, according to officials on both sides. These projects could cost at least $4 billion combined.
Following the signing of an agreement in March, India’s state-run NTPC is working on a 100-megawatt solar power plant in the Trincomalee district’s Sampur.
In August, Sri Lanka’s Power Minister Kanchana Wijesekera stated that India’s Adani Group is awaiting regulatory approval for two $500 million wind power projects in the Mannar region.
According to two officials from the Sri Lankan energy ministry, ONGC Videsh Limited (OVL), the overseas arm of Delhi’s state-run Oil and Natural Gas Corporation, has set its sights on exploration licenses off the northwestern coast. Additionally, ONGC Videsh Limited (OVL) has engaged in numerous discussions with Sri Lankan authorities who are finalizing regulations ahead of inviting bids from global businesses.
Both requested anonymity due to ongoing discussions.
Reuters asked Adani, NTPC, and OVL about their projects in Sri Lanka, but they did not respond.
According to a source with knowledge of the discussions, the push for oil and gas exploration was discussed in June.
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The Sri Lankan government, according to Foreign Minister Sabry, wants to take advantage of India’s growing economic power, particularly through renewable energy and infrastructure projects, while also keeping important relationships with other major allies like China and Japan.
New Delhi is still wary of China’s presence in Sri Lanka, despite India’s recent goodwill toward the country.
The rivals in the region got into a diplomatic fight in July and August over a Chinese military survey ship called Wang 5 that stopped at the Hambantota port in southern Sri Lanka.
Arindam Bagchi, a spokesperson for the Indian Foreign Ministry at the time, stated that despite India’s “unprecedented” support for Sri Lanka during the economic crisis, New Delhi would not compromise on its security requirements.
Sri Lanka still needs China, one of its biggest creditors, to agree to a debt restructuring plan, along with India and Japan, to clinch the IMF loan deal, according to officials in Sri Lanka. This is the case despite India’s crucial assistance during the financial crisis this year.
Sabry stated, “Chinese investment is very important, and Chinese relationships are very important.”
Therefore, I don’t believe India or anyone else anticipates Sri Lanka not working with China. To be fair by them, not a solitary one of them have asked us.”
