Sri Lankan President Ranil Wickremesinghe made an official two-day visit to India from 20- 21st July 2023. He was welcomed by Union Minister of State (MoS) for External Affairs V Muraleedharan. This marks Wickremesinghe’s first trip to India since he was elected president of Sri Lanka in July 2022.
- The visit takes place as both countries celebrate the 75th anniversary of the establishment of diplomatic relations in 2023.
During the visit, Wickremesinghe met Indian External Affairs Minister S. Jaishankar, National Security Advisor Ajit Doval, Adani Group chairman Gautam Adani and President of India Draupadi Murmu.
Note: Sri Lanka is an important partner in India’s “Neighbourhood First” policy and SAGAR (Security and Growth for All in the Region) vision.
India’s Financial Assistance
In 2022, Sri Lanka was hit by a financial crisis due to a severe paucity (insufficiency) of foreign exchange reserves.
- India extended emergency financial support of about USD($) 4 billion, providing for fuel and essential items.
- India also helped Colombo secure a nearly $3-billion package from the International Monetary Fund (IMF).
Important MoU’s exchanged between India and Sri Lanka:
- Joint Declaration of Intent (JDI) in the field of Animal Husbandry and Dairying
- MoU on cooperation in the field of renewable energy.
- Memorandum of Cooperation for economic development projects in Trincomalee district of Sri Lanka.
- Network to Network Agreement between NPCI International Payments Limited (NIPL)and Lanka Pay for UPI application acceptance in Sri Lanka
- Energy Permit for Sampur Solar Power Project.
India & Sri Lanka have Adopted Vision Document to Boost Economic Partnership
India and Sri Lanka adopted a vision document titled, “Promoting Connectivity, Catalysing Prosperity” that would strengthen maritime, air, energy and people-to-people connectivity to boost the economic partnership between India and Sri Lanka.
- The vision is to accelerate mutual cooperation in tourism, electricity, business, higher education, and skill development.
The vision document is based on five pillars
1.Maritime connectivity:
i.It outlines cooperation in the development of ports and logistics at Colombo, Trincomalee and Kankesanthurai, with an aim to consolidate regional logistics and shipping.
ii.It also talks of the resumption of passenger ferry services between Nagapattinam in India and Kankesanthurai in Sri Lanka besides working towards early resumption of ferry services between Rameshwaram and Talaimannar.
2.Air connectivity:
Expansion of flights between Chennai and Colombo, besides exploring connectivity between Chennai and Trincomalee, Batticaloa and other destinations in Sri Lanka.
3.Energy and power connectivity:
i.MoU on renewable energy for Sri Lanka to achieve 70% power from renewables by 2030.
ii.Establishment of high-capacity power grid interconnection to enable electricity trade including those of the BBIN (Bangladesh, Bhutan, India, Nepal) initiative.
iii.Accelerate Sampur Solar power project and Liquefied Natural Gas (LNG) infrastructure to explore green hydrogen.
iv.Ongoing cooperation in Trincomalee Tank Farms for the development of industry, energy, and economic activity.
v.Joint construction of a petroleum pipeline from India.
vi.Collaborative hydrocarbon exploration in offshore basins.
4.People-to-People connectivity:
The two countries also plan “to promote awareness and popularize India’s Buddhist circuit, and Ramayana trail as well as ancient places of Buddhist, Hindu and other religious worship in Sri Lanka for enhancing tourism”,
5.Agreement on Acceptance of UPI in Sri Lanka:
On 21st July 2023, Indian Prime Minister (PM) Narendra Modi and Sri Lanka President Ranil Wickremesinghe signed a network-to-network agreement on the acceptance of UPI in Sri Lanka which will increase Fintech connectivity.
- The agreement was signed between NIPL and Lanka Pay which allows Sri Lankan citizens to use UPI-based payment systems for various transactions, promoting seamless and efficient cross-border payments.
Prior to Sri Lanka, India’s UPI service has been adopted by Singapore, the United Arab Emirates (UAE), Nepal, Bhutan and France.
About Unified Payments Interface (UPI):
i.UPI is an instant real-time payment system developed by the National Payments Corporation of India (NPCI) which makes swift payments using a Virtual Payment Address (VPA) created by the customer.
ii.It facilitates inter-bank peer-to-peer and person-to-merchant transactions.
About Sri Lanka:
Prime minister- Dinesh Gunawardena
Capital- Colombo (executive and judicial capital); Sri Jayawardenepura Kotte (legislative capital)
Currency- Sri Lankan Rupee
