India will work closely with Sri Lanka on discussions regarding debt restructuring as well as on the path of its economic recovery, with greater collaboration in promotion of digital education, digital payments, digital identity and cooperation in dairy development opening up vistas of greater engagement. The suggestions came up during Finance Minister Nirmala Sitharaman‘s meeting with Prime Minister Dinesh Gunawardena in Colombo. The meeting also saw discussions on various aspects of India-Sri Lanka economic partnership, promotion of greater trade, investment, tourism and people-to-people ties.
The Finance Minister also met with President Ranil Wickremesinghe and highlighted the potential of the ‘Vision document on Economic Partnership’ — adopted during his visit to India in July 2023 – to further strengthen the countries’ maritime, air, digital, energy and people-to-people connectivity. Sitharaman’s visit comes at a time when Sri Lanka is envisioning to build a new market economy with focus on tourism, sustainability, agricultural modernisation and digitisation which holds opportunity for collaboration with India.
Sitharaman has offered India’s role as lead partner in the initiative through technical collaboration and expressed satisfaction on the progress made in recent negotiations on the Economic and Technology Cooperation Agreement and UPI based digital payments, besides sharing India’s views on investment-based support and bilateral investment treaty. Sitharaman and Wickremesinghe also had discussions on cooperation in Inter-grid connectivity, aviation, power projects, oil exploration in Mannar. India and Sri Lanka also witnessed exchange of a Memorandum of Understanding on solar electrification of religious places in Sri Lanka for which India will allocate INR 82.40 crore out of the GOI grant assistance of INR 107.47 crore earmarked for the promotion of Buddhist ties.
Addressing the India Sri Lanka Business Summit, Sitharaman suggested drawing guidance from the India-Sri Lanka Economic Partnership Vision document in terms of identifying future areas of economic partnership and called upon Sri Lanka’s business community to explore expanding the economic basket to include sectors such as energy and pharma. The Finance Minister also offered to share India’s experience in renewable energy as the per unit cost of solar energy in India has been reduced significantly over the last 6-7 years.
Sitharaman shared with the business community India’s success with digital public infrastructure and how use of digital technology had enabled financial inclusion and facilitated ease of living for the people. The Finance Minister underlined the need for stronger India-Lanka engagement in strengthening bilateral relations between the two nations — especially in the current global economic context – to explore policy options which can help minimise risks and volatility emanating from global economic and political developments. Sitharaman also inaugurated the second State Bank of India Branch in Jaffna which could cater to emerging business potential in the Northern Provinces of Sri Lanka.
The SBI is the first foreign bank in Sri Lanka to successfully launch pathbreaking direct LKR-INR trade. This initiative has gained momentum and found currency among local corporates, besides giving vital support to the Sri Lankan economy by giving an option to importers of Sri Lanka without dependency on the US Dollar. The Bank is steadily scaling up its remittance services by leveraging a strong digital platform, which includes the SBI Sri Lanka YONO app and online banking, alongside its traditional in-branch operations.