With $968m in loans, India overtakes China to become Sri Lanka’s top lender

Overtaking China, India has become the largest bilateral lender to Sri Lanka by disbursing a total of $968 million in loans in four months of 2022, according to a media report.

Notably, with its predatory lending policy, China has maintained its position as the largest bilateral lender to Sri Lanka over the past five years. From 2017 to 2021, China disbursed approximately $947 million. Of the total amount loaned, $809 million was secured in the form of market loans from the China Development Bank, ANI reported citing the Daily Financial Times (FT) report. The report obtained data from public finance.lk.

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According to the report, the Asian Development Bank (AfDB) has been the largest multilateral lender for the past five years disbursing $610 million in 2021.

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India disbursed $377 million and AfDB disbursed $360 million. The collective amount was equal to 76% of the total disbursements that were made to the island country until April 2022, ANI reported quoting Daily FT.

Read also : India set to secure Lanka port rights

On the other hand, the Permanent Representative of India to the UN, Ruchira Kamboj, informed about the funds that have been provided to Sri Lanka. At a joint annual UNGA debate on the reports of the Peacebuilding Commission (PBC) and the Peacebuilding Fund (PBF), Ruchira Kamboj said that India had provided 4 billion of food and financial aid to Sri Lanka.

“In our immediate vicinity, we continue to help our good friend and neighbor Sri Lanka achieve food security by providing nearly $4 billion in food and cash assistance over the past few months,” Kamboj said.

On top of that, India handed over 21,000 tonnes of fertilizer to Sri Lanka in August. India’s High Commission in Colombo, Sri Lanka, in its tweet, viewed the step as an initiative to enhance friendship and cooperation between the two nations.

Since the arrival of the COVID pandemic, Sri Lanka has been grappling with its worst economic crisis with extreme inflation in the country due to fuel and food shortages. During the crisis, India has been at the forefront in helping the nation and providing economic assistance to Sri Lanka.

The country is also facing an extreme crisis in foreign exchange reserves which has reduced its power to import essential goods, including fuel and food. People witness constant power cuts and gasoline shortages in Sri Lanka.

(With ANI entries)

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