Written by Nirupama Subramanian Courtesy The Indian Express

Rajapaksa, who arrived in Delhi on Wednesday for a three-day visit, met Prime Minister Narendra Modi and is scheduled to meet External Affairs Minister S Jaishankar and Finance Minister Nirmala Sitharaman to finalise the credit line.

AS INDIA prepares to sign off on a $1-bn emergency credit line to Sri Lanka for food and essential commodities during Lankan Finance Minister Basil Rajapaksa’s visit, it will push Colombo for the finalisation of earlier proposals on the joint development of Palaly airport and Kankesanthurai harbour, both in the Jaffna peninsula close to the Tamil Nadu coast.

Rajapaksa, who arrived in Delhi on Wednesday for a three-day visit, met Prime Minister Narendra Modi and is scheduled to meet External Affairs Minister S Jaishankar and Finance Minister Nirmala Sitharaman to finalise the credit line.

India has extended $1.4 bn to Colombo since January — a $500 mn line of credit, $400 mn currency swap and $500 mn for loan deferment with Asian Clearing Union — after Rajapaksa’s last visit in December 2020.A mountain destination like no otherSponsored by NEOMLearn more

The Ministry of External Affairs said Rajapksa briefed Modi on initiatives being taken by both countries to increase bilateral economic co-operation, and conveyed his thanks for the support extended by India for the Sri Lankan economy”.

Modi said Sri Lanka had a central role in India’s Neighbourhood First policy and maritime SAGAR (Security and Growth for All in the Region) doctrine. He also noted the potential for increasing bilateral tourist flows, including through joint promotion of Buddhist and Ramayan circuits.

Speaking to The Indian Express, an official said Delhi was pressing” Colombo to quickly finalise the two connectivity” projects at Palaly and Kankesanthurai. Both projects will help Colombo resuscitate its tourism industry after the double blow of the Easter bombing in 2019 and the pandemic from 2020, the official said.

The two sides are also looking at restarting a ferry service between Thalaimannar in north-western Sri Lanka and Rameswaram in Tamil Nadu.

The Palaly airport was opened to civilian flights from Chennai in October 2019 after a partial refurbishment of the runway, but has been closed since the pandemic. Colombo has shown no sign of reopening the facility, now known as Jaffna International Airport. India had helped in lengthening the runway at Palaly before its reopening, and has expressed interest in further development.

The two countries had signed an MoU on developing the Kankesanthurai harbour in 2018, with Exim Bank providing funds for carrying out feasibility studies, preparing a detailed project report, conducting geo-spatial surveys and removing wreckage. The project has not progressed.

The two projects will add to India’s portfolio in the Tamil-dominated north-east and the theatre of its three-decade civil war that ended 2009.
On March 11, Indian companies concluded two other major agreements for projects in the region: an agreement between National Thermal Power Corporation and Ceylon Electricity Board to set up a solar power plant at Sampur in Trincomalee and a deal by Adani Group to set up two renewable energy projects worth $ 500 million, likely at Mannar in the north-west.

While the terms of the Adani agreement are not in the public domain, both agreements are significant given that at India’s protest last year, Colombo cancelled a Chinese renewable energy project in the islands off Jaffna. In January, India and Sri Lanka signed a deal for the joint development of the Trincomalee Oil Tank farm, another project that had faced many obstacles.

The Sri Lanka High Commission said Modi and Rajapaksa discussed a wide range of bilateral issues”, and that other than tourism and fisheries, renewable energy was also discussed. The statement referred to digitalisation”, which likely relates to a recent pact to replicate the Aadhaar model in Sri Lanka.