India joins hands with Japan and France to launch platform for negotiations on Sri Lanka’s debt restructuring

India expressed its commitment to support Sri Lanka in dealing with its current economic crisis as it joined Japan and France in launching a common platform for negotiations among creditors to coordinate restructuring of the island nation’s debt. The high-level event was held on the sidelines of the International Monetary Fund (IMF)- World Bank (WB) Spring Meetings in Washington DC on Thursday (April 13, 2023).

India’s Finance Minister Nirmala Sitharaman, Japan’s Finance Minister Suzuki Shunichi, France’s Director General of the Treasury Emmanuel Moulin, and Sri Lanka’s State Minister of Finance Shehan Semasinghe were present in the meeting. Sri Lanka’s President and Finance Minister Ranil Wickremesinghe participated virtually.

“The purpose of the event was to demonstrate the multilateral cooperation regarding the debt restructuring process among the creditors, together with Sri Lanka,” India’s Ministry of Finance said on Friday.

Briefing the media on the ‘Launch of the Debt Restructuring Negotiation Process on Sri Lanka’, Sitharaman emphasised that a collaboration among creditors was important to ensure transparency and equality in treatment of all creditors in the debt restructuring discussions.

Media reports have cited government data to say that Sri Lanka owes over USD 7 billion to its creditors, including India.

India has been consistent in its support to Sri Lanka since the beginning of the current economic crisis, helping out with humanitarian aid as well as financial assistance. In 2022, India provided unprecedented financial support of USD 4 billion, in line with the ‘Neighbourhood First’ Policy.

India was the first creditor nation of Sri Lanka to support debt restructuring and convey financing assurances to the IMF. This was meant to clear the way forward for Sri Lanka and in securing the IMF programme.

In a bid to boost the Sri Lankan economy, India is also trying to encourage greater investments, particularly in key sectors like energy, tourism and infrastructure.

"India is a reliable neighbour, a trustworthy partner, one who is prepared to go the extra mile when Sri Lanka feels the need. We will stand by Sri Lanka in this hour of need and are confident that it will overcome the challenges it faces," EAM Jaishankar had said after meeting Sri Lankan President Wickremsinghe during a visit to Colombo in January this year.