India-Sri Lanka enter into a currency swap agreement

 The Dollar Business Bureau The Prime Minister of India, Narendra Modi, on Friday said the economic ties form a key pillar for a strong relation between India and Sri Lanka. Addressing media in Colombo during his visit to the island nation, the Indian Prime Minister shared India’s commitment towards effective enhancement of trade cooperation with Sri Lanka. Narendra Modi informed that the customs authorities of India and Sri Lanka came to an agreement on Friday, while expressing hope that the move will simplify trade and remove non-tariff barriers between the two economies. Modi further informed that Lanka IOC, Indian Oil’s subsidiary in Sri Lanka, and Ceylon Petroleum Corporation, have also agreed to develop Upper Tank Farm of the China Bay Installation in Trincomalee and announced the formation of a joint working group for this purpose and also on ocean economy. He also asserted India’s strong commitment towards transforming Trincomalee as a regional petroleum hub. The Prime Minister also sought the early commencement of work for Sampur Coal Power project, which was expected to meet Sri Lanka’s energy needs. Stressing on the need for increase of connectivity and tourism cooperation between the two nations, Modi said the Government of India would extend ‘Electronic Travel Authorization-enabled-Tourist Visa on Arrival’ service to Sri Lanka’s citizens starting from April 14, 2015. Stating that India would partner with Sri Lanka  in development, the Indian PM assured of providing first line of Credit of up to $318 million towards the restoration and up gradation of railways sector. The Reserve Bank of India and Central Bank of Sri Lanka have also agreed upon the Currency Swap Agreement of $1.5 billion, in a move to stabilize Sri Lanka n rupee. Earlier this week, India and Sri Lanka had Secretary-level interactions on issues like Free Trade Agreement (FTA), non-tariff barriers, upgrading of economic engagement including investments and services, among others related to bilateral trade. During the meet, the Indian side reiterated its commitment saying the Indian investments would increase the export capacity of Sri Lanka and also a need for establishment of greater linkages with production and supply chains in the Indian market. The Indian side also pitched for investments in the form of joint ventures, where the Sri Lankan private and state enterprises can work in coordination with the Indian enterprises.  

This article was published on March 13, 2015.