Sri Lanka to receive $318 million from India as Line of credit

  • The Prime Minister of India Mr. Narendra Modi, at his first visit to Sri Lanka in March 2015 had declared a fresh Line of Credit (LOC) of US$ 318 million for the development of railway sector in Sri Lanka.
  • Government of India has already provided four Lines of Credit for the development of railway sector in Sri Lanka through its EXIM bank amounting to approximately US$ 966 million.
  • The credit has been used by Sri Lanka to Improve it Southern and Northern Railways.
  • That visit of Prime Minister Modi was the first standalone bilateral visit by an Indian prime minister since 1987.

Current Status of Agreement

  • India on June 6th  signed an agreement with Sri Lanka to provide USD 318 million as line of credit to develop the island nation’s railway sector.
  • The agreement was signed by RHS Samaratunga, Secretary, Ministry of Finance and Mass media, and David Rasquinha, Managing Director of India’s Export0Import Bank in Colombo.
  • India has been Sri Lanka’s major development partner in the South Asian region for more than 40 years.
  • Presently Indian development assistance mainly focuses on improvement of infrastructure, livelihood development, education, healthcare, and capacity building

China’s Investment in Sri Lanka 

  • China has been investing heavily in Sri Lanka, developing mainly ports that could potentially be used as a base for its navy, though Beijing says the investments are part of its Belt and Road Initiative that aims to link it with Europe and Africa via the Indian Ocean.
  • Due to this there is increase of china’s presence in Indian Ocean.
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