India, Sri Lanka ink 10 agreements including in defence, power, energy

India and Sri Lanka today (5 April) concluded crucial agreements on defence cooperation, electric grid connectivity and an energy hub at Trincomalee as Indian Prime Minister Narendra Modi assured Sri Lankan President Anura Kumara Dissanayake that New Delhi would continue assisting the island nation's economic recovery efforts.

The two sides finalised ten agreements for cooperation in areas ranging from digital transformation to debt restructuring and health and medicine and the two leaders virtually inaugurated the Sampur power project that is to be built with Indian support.

"Whether it was the terrorist attack of 2019, the Covid pandemic or the recent economic crisis, we have stood with the people of Sri Lanka in every difficult situation," Modi said at a joint media interaction after his meeting with Dissanayake.

The memorandum of understanding (MoU) on a framework for defence cooperation, the first such agreement between the two countries, will institutionalise joint exercises, training and high-level exchanges.

Expressing his gratitude to Dissanayake for his "sensitivity towards India's interests", Modi said: "We welcome the important agreement concluded in defence cooperation. We also agreed to work together on the Colombo Security Conclave and security cooperation in the Indian Ocean."

Dissanayake reiterated an assurance first given during his visit to New Delhi last December to not allow Sri Lanka's soil to be used for any activity against India's interests.

The two sides also signed an MoU for the interconnection of their electricity grids for power trade. A tripartite MoU involving the United Arab Emirates (UAE) will focus on the development of Trincomalee as an energy hub, including the construction of a multi-product energy pipeline. Another MoU will enable the sharing of India's digital solutions for digital transformation in Sri Lanka.

Noting that Sri Lanka has a special place in India's "Neighbourhood First" policy and MAHASAGAR vision, Modi announced a range of measures to boost the island nation's efforts to recover from the worst economic crisis in its history. India had earlier extended financial assistance worth more than $4 billion to help Sri Lanka tide over the economic downturn in 2022.

"In the last six months alone, we have converted loans worth more than $100 million into grants. Our bilateral debt restructuring agreement will provide immediate help and relief to the people of Sri Lanka," Modi said.

"Today we have also decided to reduce the interest rate. This is a symbol that even today India stands with the people of Sri Lanka."

Modi said a support package of about 2.4 billion Sri Lankan rupees will be given for social and economic development of the country's eastern provinces.

The two leaders also virtually inaugurated a project for supplying solar rooftop systems to 5,000 religious institutions across Sri Lanka with India's credit assistance of $17 million. The project will benefit Hindu, Buddhist, Christian and Muslim shrines and generate a total of 25 MW of green power.

Dissanayake thanked the Indian government for its valuable support for Sri Lanka's economic recovery, growth and stability, saying the assistance extended in times of need was "deeply cherished". He added, "As a result of this friendship, we have been able to focus on economic transformation."

"I briefed Prime Minister Modi of our successful debt restructuring programme and our current economic situation, which is heading towards recovery. I thank the government of India for its support and cooperation in finalising the restructuring agreements," Dissanayake said.

"We also discussed in detail about furthering our collaboration, including the already excellent defence cooperation between the two countries. I reaffirmed Sri Lanka's assurance that it will not permit its territory to be used in any manner inimical to the security of India," he said.