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India Overtakes China To Become Sri Lanka's Largest Lender

India emerged as Sri Lanka's largest bilateral lender by disbursing a total of USD 968 million in loans in four months of 2022, whereas, China has loaned more than USD 947 million from 2017 to 2021

Photo Credit : @narendramodi/Twitter


Sri Lankan President Ranil Wickremesinghe and Indian Prime Minister Narendra Modi

India has surpassed China to become the top bilateral lender to Sri Lanka after disbursing loans of USD 968 million in just four months of 2022, according to a media report.

Between 2017 and 2021, China loaned more than USD 947 million to Sri Lanka and retained the status of the largest bilateral lender during the past five years.

According to the reports, USD 809 million of the entire amount lent was received as market borrowings from the China Development Bank.

The Asian Development Bank (ADB) has given USD 360 million, whereas India has provided USD 377 million. The total amount was equal to 76 per cent of all payments paid to the island nation until April 2022.

During the UNGA annual joint debate on the reports of the peacebuilding commission (PBC) and peacebuilding fund (PBF), India's permanent representative to the UN, Ruchira Kamboj stated that India has given Sri Lanka USD 4 billion in food and financial aid.

Kamboj said, “By giving approximately USD 4 billion in food and financial aid over the past few months, we have continued to assist our good friend and neighbour Sri Lanka in ensuring food security in the area.”

In August, India supplied 21,000 tonnes of fertiliser to Sri Lanka. In a tweet, the Indian High  Commission in Colombo, Sri Lanka, described the action as an effort to foster goodwill and collaboration between the two countries.

Due to a severe shortage of foreign exchange, Sri Lanka is currently experiencing its greatest economic crisis since the Covid-19 virus outbreak. 

Additionally, a shortage of foreign exchange, leads to shortages of imported food and fuel. People are also witnessing frequent power outages and gasoline shortages.

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sri lanka economic crisis loans china Debt Trap