India does not plan to provide fresh financial support to Sri Lanka on top of the nearly $4 billion it has extended this year, according to Reuters.
An Indian government source with direct knowledge of discussions with Sri Lanka said India has decided so as Sri Lanka’s economy starts to stabilise after a preliminary loan agreement with the International Monetary Fund (IMF).
India has been the biggest provider of aid this year to Sri Lanka which is facing its worst economic crisis, although the situation now is less severe than it was between May and July.
“We have already given $3.8 billion worth of assistance. Now it’s all about the IMF. Countries can’t keep giving assistance,” the Indian government official said.
A Sri Lankan government source said India’s decision was not a surprise and that New Delhi had “signalled” to them a few months ago that there would be little further large-scale support forthcoming.
The source, however, said that India would be invited to a donor conference that Sri Lanka was planning to hold with Japan, China and possibly, South Korea, later this year.
Sri Lanka and the IMF reached a preliminary agreement in early September for a loan of about $2.9 billion, which is contingent on the country receiving financing assurances from official creditors and negotiations with private creditors. (NewsWire)