Key Takeaways
- As part of boosting India – Sri Lanka relation India extended $200 million short-term loan facility from the Exim Bank of India, as the island nation struggles to cope with a deepening economic crisis
- India has extended nearly $3 billion to cash-strapped Sri Lanka since January 2022, by way of currency swaps, credit lines for essentials, and loan deferments to help Sri Lanka amidst one of its worst economic crises in history
- India has helped Sri Lanka defer repayment of loans totaling $1 billion under the Asian Clearing Union.
- 400,000 MT of fuel has been delivered to Sri Lanka through a $500 million credit facility, the Indian High Commission in Colombo.
- “Multi-pronged assistance provided by India testifies to the importance Government of India attaches to the welfare of the people of Sri Lanka and is guided by the twin principles of ‘Neighborhood First’ and SAGAR (Security and Growth for All in the Region).
About Export Import Bank of India (EXIM)
- Lines of Credit (loC) are extended by the EXIM bank to foreign financial institutions, regional development banks, sovereign governments, and other entities.
- As a result, the EXIM Banks allow purchasers in those countries to import developmental and infrastructure projects, equipment, products, and services from India on a deferred credit basis.
- The bank also assists Indian corporations in putting up joint ventures, subsidiaries, and international acquisitions.
- Functions
- It provides funding for the import and export of goods and services from India and other nations.
- Provides banks and other financial institutions with refinancing services for their foreign trade finance.
- Importers and exporters can also get technical and other help from the bank. Import-export of goods involves a variety of processes and procedures, depending on the country of origin. In addition, the EXIM bank will offer advice and support in administrative concerns.
- Will also underwrite shares, debentures, stocks, and bonds issued by enterprises involved in international trade.
- Foreign banks and governments will be offered short-term loans or lines of credit.
- In the case of multi-funded projects in other countries, the EXIM bank can also give business counselling services and specialized expertise to Indian exporters.
About Neighborhood First Policy
- It is a part of India’s foreign policy that actively focuses on developing connections with India’s immediate neighbors, which is referred to in the media as the “neighborhood first” policy.
- It got off to a good start when PM Modi invited all heads of state and government from South Asian countries to his first term inauguration, and then held bilateral talks with each of them individually, which was labelled a mini SAARC summit.
Pic Courtesy : Deccan Herald
Content Source : The Hindu