External Affairs Minister S Jaishankar has made it clear that India has been “very supportive of Sri Lanka” and is “trying to help”.
In pursuance of the central place that Sri Lanka occupies in its Neighbourhood First policy, India has extended this year itself an unprecedented support of over $3.8 billion for ameliorating the serious economic situation in Sri Lanka.
Even before the crisis in Sri Lanka took a turn for the worse over the weekend, New Delhi had put together a comprehensive plan to step up its assistance to Colombo, boost critical infrastructure and to use the opportunity to strengthen traditional bonds between the two neighbours.
The plan to look into “opportunities” to enhance India’s “economic linkages” with Colombo was discussed threadbare during an inter-ministerial meeting chaired by Deputy National Security Advisor (NSA) Vikram Misri on July 1.
Besides a discussion on implementation of India’s priority projects, trade and connectivity in Sri Lanka, the need to fast-track a proposal to use the Indian rupee for transactions in Sri Lanka was also deliberated upon in the meeting,. India is working on a multi-sector approach, which is “more long-term” and aimed at “deepening trade and investment linkages”.
This would involve development of the Trincomalee Port on Sri Lanka’s north-eastern coast, power projects, increasing frequency of flights connecting India and Sri Lanka, development of a fisheries harbour and the resumption of ferry services, among others.
New Delhi has already extended a helping hand, committing over $3 billion in loans, credit lines and credit swaps since January this year. Besides, India has also delivered essential medical supplies, food items, food grains and petroleum products to the island nation in its time of crisis.
India’s eagerness to reassert its presence in Sri Lanka comes in the backdrop of China’s growing influence in the island nation. Beijing, which ranks third among Colombo’s creditors and accounts for a little over 10 per cent of its outstanding debt, has invested heavily in infrastructure, including the development of strategic ports, in Sri Lanka.
A slew of “priority projects” – proposals to increase India’s trade and connectivity with Sri Lanka – were discussed during the inter-ministerial meeting chaired by the Deputy NSA earlier this month.
This included enhancing India’s presence in petroleum retail in the island nation, preparing an integrated proposal for the development of Trincomalee port, plans for an energy hub, establishment of subsea connectivity to Kochi, and development of a trans-shipment port.
Developing an airport, setting up a refinery, the development of 2,400 acres of land as a heavy industries zone, and refurbishment of oil tanks were also part of the proposal. Ministries concerned, including the Ministry of Petroleum and Natural Gas and the MEA, have been directed to draw up a proposal in this regard and share it with Sri Lanka soon.
A key area where India is keen on increasing its presence is the “economically strategic” sector of petroleum retail, said an official. Fasttracking approvals for Lanka Indian Oil Corporation (LIOC), a subsidiary of Indian Oil, for taking over additional sheds – fuel stations/outlets – was also discussed in the meeting.
Government officials aware of the plan said India is also looking to increase its presence and invest in Sri Lanka’s power sector. This includes finalising the formation of a joint venture for the power grid connectivity project and fast-tracking the solar power plant in Sampur in eastern Trincomalee