• Agreements exchanged during Indian PM Modi’s visit
• India pursuing investment and grant-led strategy for SL’s recovery

Sri Lanka has concluded bilateral debt restructuring of about $ 1.4 billion debt with India, during Indian Prime Minister Narendra Modi’s visit to the island nation, India Foreign Secretary Vikram Misri said.

In a press conference in New Delhi on Saturday (5), he said that India has concluded the debt restructuring process with Sri Lanka with the exchange of bilateral mandatory agreements on debt restructuring.

“We have been pursuing an investment-led strategy with Sri Lanka together with a grant assistance-oriented approach to ensure that Sri Lanka is firmly on the path to sustainable and long-term economic recovery,” he said.

As of September 2024, Sri Lanka had about $ 1.366 billion in total debt outstanding (including unpaid principal) to India.

In his press briefing in Colombo, Indian PM Narendra Modi said that in the last 6 months alone, India has converted loans worth more than $ 100 million into grants, while he said that India has also decided to reduce interest rates on the repayment.

India has provided financial assistance with nearly $ 4.5 billion to Sri Lanka since the economic crisis in 2022, “offering a much needed lifeline” to Sri Lanka, Foreign Secretary Misri said.

Sri Lanka concluded its $ 12.5 billion debt restructuring with commercial creditors in December, where it issued new bonds in exchange for the old bonds.

The total value of outstanding foreign debt of Sri Lanka stood at Rs. 10.6 trillion by the end of November 2024.