India Extends $300 Million Credit Line to Sri Lanka for Purchase of Pharmaceuticals

In a recent development, India has extended the period for utilizing around US $300 million out of the US $1 billion credit line that was offered to Sri Lanka. The credit line was initially provided for one year to purchase essential commodities, which has now lapsed. However, it has been reported that approximately US $700 million of the credit line has already been utilized.

As per the latest update, the remaining amount of the credit line has been extended, and it is now intended for the purchase of pharmaceuticals. Sri Lankan High Commissioner Milinda Moragoda reportedly made the request for this extension during a meeting with Indian Finance Minister Nirmala Sitharaman on March 21, 2023. He also made a similar request to the Reserve Bank of India during a meeting on March 28, 2023.

This extension of credit comes as a significant relief for Sri Lanka, which has been grappling with the economic fallout of the COVID-19 pandemic. The country has been facing a shortage of essential medicines, and the extended credit line will enable Sri Lanka to procure much-needed pharmaceuticals. The move also highlights the strong bilateral ties between India and Sri Lanka and reinforces India’s commitment to supporting its neighbour during these challenging times.