India’s 2-day state visit to Modi in Sri Lanka as concerns grow over China’s influence
Colombo, Sri Lanka (AP) – Prime Minister Narendra Modi on Friday began a two-day state visit to neighboring Sri Lanka, and he is expected to sign several power and defense agreements as he fears regional competition for China’s impact on debt-wrong island states.
Modi was the first foreign leader to visit Sri Lanka as its president, Anura Kumara Dissanayake, took office in September and was the follow-up to the latter’s visit to New Delhi in December.
Modi plans to start construction work almost on a new solar power plant in eastern Sri Lanka.
India has been paying attention to the growing presence of Chinese people in Sri Lanka, which is located in one of the busiest transportation routes in the world, and India believes it is part of its strategic backyard.
In recent years, China has played an influence in the country by incorporating it into its belt and roads global development plan.
Modi is expected to hold bilateral talks with Sri Lankan leaders and officials on Saturday and sign several bilateral agreements. He will actually open a 120 MW solar power plant in the eastern part of the island.
Electricity projects are crucial to Sri Lanka, which is working to reduce its dependence on fossil fuel generation.
Sri Lanka faced a serious power crisis in 2022, when its foreign reserves depleted enough oil and coal stocks after the country’s foreign reserves.
The support of these two regional rivals is crucial for Sri Lanka to stand out in the worst economic crisis in decades, which ultimately paved the way for Dissanayake’s party to take office.
Beijing was once widely regarded as its free-flowing loans and infrastructure investments prevailed. But Sri Lanka’s economic collapse in 2022 has provided opportunities for India, with New Delhi intervening in a large amount of financial and material aid, including food, fuel and medicine.
At the same time, China’s support for restructuring infrastructure loans is crucial to Sri Lanka. Under Dissanayake, Sri Lanka has been trying to get rid of bankruptcy by restructuring its amazing debt.
Sri Lanka declared bankruptcy in April 2022, with debts exceeding US$83 billion, and more than half of the debts to foreign creditors. It seeks help from the International Monetary Fund, which approved a $2.9 billion four-year bailout package in 2023, under which Sri Lanka is required to restructure its debt.
Last September, Sri Lanka said that the debt restructuring process had been concluded after reaching an agreement with bilateral and multilateral creditors and private bondholders. Sri Lanka seeks to receive $17 billion in debt relief.
The crisis in Sri Lanka was largely the result of poor management of the economy, combined with the consequences of the 199 pandemic and the 2019 terrorist attacks destroyed its important tourism industry. The pandemic has also disrupted the remittance flow of Sri Lankans working abroad.
