India offers $450 million line of credit to Sri Lanka 

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News:Sri Lankan President is on his first overseas visit to India after taking over as Sri Lanka president.

Facts:

Key takeaways from the visit:

  • India has announced a line of credit of USD 400 million for development projects in Sri Lanka besides granting a separate fund of USD 50 million to help the country deal with challenges of terrorism.
  • The two countries have also agreed to work closely on matters related to the economy and security in the backdrop of rising competition between China and the US for influence in the Indian Ocean region.
  • On India’s concerns on Chinese projects,Sri Lanka has said that cooperation between India and Sri Lanka is multifaceted with priority given to security-related matters.
  • While with other countries,initiatives for cooperation are by and large economic and commercial.
  • Sri Lanka has also asked for India’s cooperation in the economic development of Sri Lanka’s northern and eastern regions which have a sizeable Tamil population.
  • Indian Prime Minister has also raised the issue of Indian fishermen, mainly from Tamil Nadu who have been detained by Sri Lanka for crossing the maritime boundary.

Significance of the visit:

  • The visit assumes significance owing to the growing influence of China in the Indian Ocean region.
  • The visit could set the tone of India-Sri Lanka relations as Sri Lanka has positively reciprocated India’s gesture of partnership and stressed that India remains our relative even as China is its trade partner.
  • However,Sri Lanka cannot wish away China completely as by the end of 2017,10% of its debt was owed to China.