India–Sri Lanka Relations

India’s Financial Assistance during Sri Lanka Crisis

Sri Lanka faced a severe economic crisis in 2022, marked by foreign exchange depletion, high inflation, and shortages of fuel, food, and medicines (IMF/official assessments).

  • India emerged as the first responder and “lender of last resort”, providing about USD 4 billion assistance in 2022 through lines of credit, currency swaps, and humanitarian aid.
  • Key components of India’s support included:
    • USD 500 million Line of Credit for fuel imports
    • USD 1 billion credit facility for essential goods (food, medicines)
    • Currency swap (~USD 400 million) under SAARC framework
  • India’s assistance helped Sri Lanka maintain essential imports, ....
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