India to up aid to Sri Lanka by $2 billion more: Report

With financial crisis-ridden Sri Lanka having announced a temporary suspension of its debt payment, India is reportedly willing to step in and provide financial assistance of another two billion dollars to the nation.

Sri Lanka's High Commissioner to India Milinda Moragoda met Indian Finance Minister Nirmala Sitharaman in New Delhi yesterday (April 13) to review the present status of the two nations' economic cooperation with each other as Sri Lanka enters negotiations with the IMF for an economic adjustment programme, reports our New Delhi correspondent.

Moragoda thanked Sitharaman for the assistance India is extending to Sri Lanka in the form of credits for essential commodities and fuel and also for balance of payment support at these challenging times, the Sri Lankan High Commission said in a statement.

"The Minister and the High Commissioner observed that this assistance could form part of the bridging finance required by Sri Lanka until the economic adjustment programme with the IMF would be negotiated," it said.

India is the first country to support Sri Lanka to secure bridging finance until the programme takes place.

Earlier, Sri Lanka had announced suspension of debt repayment.

A Reuters report, quoting unnamed Indian government sources, said India is willing to offer more swap lines and loans.

India, according to the Reuter story, can still give them up to two billion dollars in swaps and support.

Another source said Sri Lanka was seeking India's help to roll over some $2 billion in dues, such as those owed to Asian Clearing Union. The source said the response had been positive from India, according to Reuters.

India has so far committed 1.9 billion dollars to Sri Lanka in loans, credit lines and currency swaps. Sri Lanka has also sought another 500 million dollars in credit for fuel.

India has also rushed sugar, rice and wheat to Sri Lanka ahead of the country's Sinhala and Tamil New Year today.