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India says it is committed to boosting investment in crisis-hit Sri Lanka

COLOMBO, Jan 20 (Reuters) – India has told Sri Lanka it is committed to boost investment in its debt-ridden neighbour, to help pull the island nation from its worst economic crisis in seven decades, Foreign Minister Subrahmanyam Jaishankar said during a visit to Colombo.

The country of 22 million has grappled with challenges over the past year ranging from a shortage of foreign currency to runaway inflation and a steep recession, in its worst such crisis since independence from Britain in 1948.

During his two-day visit, Jaishankar held talks on Thursday with Sri Lankan counterpart Ali Sabry regarding co-operation in infrastructure, connectivity, energy, industry and health services.

“Conveyed our commitment to increase investment flows to Sri Lanka to hasten its economic recovery,” Jaishankar said on Twitter on Thursday.

On Friday, he is set to meet Sri Lanka’s president and prime minister.

During the visit, the neighbours are also expected to sign a Memorandum of Understanding for a renewable power project covering three islands in Sri Lanka’s north, two sources at the power and energy ministry said.

Sri Lanka is racing to secure a $2.9-billion bailout from the International Monetary Fund but requires the backing of both China and India, its biggest bilateral lenders, to reach a final agreement with the IMF.

India has told the global lender that it strongly supports Sri Lanka’s debt restructuring plan, with Colombo owing around $1 billion to its nearest neighbour.

China is Sri Lanka’s largest bilateral lender and the last remaining major creditor has yet to agree to the plan.

Sri Lanka owed Chinese lenders $7.4 billion, or nearly a fifth of its public external debt, by the end of last year, calculations by the China Africa Research Initiative show.

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