On Friday, India and Sri Lanka announced an agreement to strengthen economic connections by strengthening collaboration in renewable energy and examining the feasibility of establishing an oil pipeline and a land bridge between the two countries.
New Delhi will also help Trincomalee, a city on Sri Lanka’s northeastern coast, create a port and an economic centre.
The declarations were made by the leaders of the two countries on Friday morning in New Delhi, as Sri Lankan President Ranil Wickremesinghe met with Indian Prime Minister Narendra Modi.
Between January and July of last year, India provided about $4 billion in assistance to Sri Lanka, which had practically run out of dollars and had fallen into a financial crisis, leaving it unable to afford crucial imports such as fuel and medication.
On Friday, Modi announced that the two leaders “adopted a vision document for our Economic Partnership” in order to increase maritime, air, energy, and people-to-people connectivity, as well as to expedite mutual cooperation in tourism, power, trade, higher education, and skill development.
Modi also stated that the two countries would move fast to connect their electrical networks and investigate the viability of constructing a petroleum pipeline and a land bridge between the countries, which are roughly 50 kilometers (31 miles) away at one point.
The projects to connect the power grids through undersea cables and the oil pipeline are expected to cost around $4 billion in total, according to officials on both sides. Few details were released on the agreements on renewables.
Wickremesinghe said that “constructing a multi-product petroleum pipeline from the southern part of India to Sri Lanka will ensure an affordable and reliable supply of energy to Sri Lanka.”
The two countries also will soon restart negotiations on a more expansive trade deal known as the Economic and Technological Cooperation Agreement.
According to Wickremesinghe, “Constructing a multi-product petroleum pipeline from the southern part of India to Sri Lanka will ensure an affordable and reliable supply of energy to Sri Lanka.”
The two countries will also soon resume talks on a broader trade agreement known as the Economic and Technological Cooperation Agreement.
Wickremesinghe also stated that he had briefed Modi on the reform measures being implemented by his government to address the island’s financial problems, and expressed gratitude for India’s assistance during the “most challenging period in modern history.”
Sri Lanka went into default on its foreign debt in May, and India is part of a joint platform established with Japan and other Paris Club members to assist the island in resolving its debt.
With $1.9 billion in outstanding debt, India is the island’s most important creditor.
While New Delhi has historically enjoyed good ties with its southern neighbor, due to its strategic location in the Indian Ocean, the little island nation has become a battleground between India and China.
Wickremesinghe’s two-day visit to New Delhi is his first since taking over as president a year ago when his predecessor was forced out due to widespread protests against the economic crisis.
