COLOMBO, June 23 (Reuters) – India’s top diplomat held talks with Sri Lanka’s president and prime minister on Thursday as India signaled its willingness to go beyond the $4 billion in loans, swaps and aid that it has already provided its cash-strapped neighbor.
Sri Lanka is facing its worst economic crisis in seven decades, with a severe foreign exchange shortage hampering the import of essentials, including food, fuel and medicines.
The island nation off the tip of southern India needs about $5 billion in the next six months to cover basic necessities for its 22 million people, who have been struggling with long queues for basic items, worsening shortages and power cuts.
Indian Foreign Secretary Vinay Kwatra, accompanied by other Indian officials, held talks with President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesinghe on providing further financial assistance to the country, the president’s office said in a statement.
“Indian Foreign Secretary Vinay Kwatra has said that the Government of India will extend its fullest support to Sri Lanka in overcoming the current difficult situation as a close friend,” the statement said.
“The Indian delegation stated that the Government of India and the political authorities are committed to provide continued support to Sri Lanka,” it added.
The Indian team held a separate meeting with Wickremesinghe, the central bank governor and finance ministry officials, an official from the prime minister’s office said.
India has been the principal source of foreign assistance to Sri Lanka this year, supplying more than $4 billion, Wickremesinghe told parliament this week.
The neighbours are also in talks for additional support including a $500 million credit line for fuel and help with importing fertilizer and rice as Sri Lanka attempts to stave off a food crisis, officials said.
Sri Lanka plans to hold a donor conference with China, India and Japan, Wickremesinghe said, as it continues talks with the International Monetary Fund for a bailout package of about $3 billion.