India announces $450 mn line of credit for infra development in Sri Lanka

India announced a $400-million line of credit for infrastructure development in Sri Lanka within hours of the arrival of President Gotabhaya Rajapaksa amid domestic upheavals in the island nation over the past one year.

Cooperation in fighting terrorism was the highlight of the official meeting between Prime Minister Narendra Modi and Sri Lankan President Gotabaya Rajapaksa who also met National Security Advisor Ajit Doval.

India announced a special line of credit of $50 million for strengthening Sri Lanka's abilities to counter terror threats and another $400 million line of credit for infrastructure development in the island nation.

“In Sri Lanka, terrorists targeted the collective human heritage and diversity,” said Prime Minister Modi, recalling the April 21 Easter bombings in the neighbouring country to which he had referred during the campaign for general elections in India and on his trips abroad.

Rajapaksa discussed his government's willingness to cooperate with India in countering international terrorism. He thanked India for inviting him soon after being elected to the office of President. External Affairs Minister S Jaishankar had flown to Colombo to congratulate the newly elected leader on November 19. This is Rajapaksa's first foreign visit after he became president.

Modi pointed out that India had been building housing units in the northern and eastern parts of Sri Lanka to assist those displaced in 2009 war. India had built 46,000 houses for the internally displaced people in the Tamil areas.

Rajapaksa's visit to India is being viewed as a significant step, especially since Sri Lanka intends to boost investment in the infrastructure sector in the coming days.

Right now, the country is facing straitened financial circumstances. Rajapaksa’s first initiative as president was to announce a slash in VAT rates, almost by 50 per cent, possibly in anticipation of the parliamentary elections that are due later this year but will likely be advanced. The elections are expected to usher in Rajapaksa's party, the Sri Lanka Podujana Peramuna (SLPP) to power in parliament as well. If that happens, former president and his elder brother, Mahinda Rajapaksa will almost certainly become prime minister.

In 2015, when the presidential election was last held in which the Rakjapaksa family lost power, Mahinda Rajapaksa had publicly blamed India for his defeat. This time, India has been proactive in keeping itself out of the election scenario, avoiding becoming a factor in domestic politics.

However, there has been some concern about the extent to which the Sinhala-Buddhist constituency has been nurtured and nourished politically by the Rajapaksas: Ranging from overt appeals to the Viharas (Buddhist temples) and their Thero (head monks) to veiled criticism of Tamils.

When the results came out, Gotabaya Rajapaksa said bluntly that although the northern and eastern provinces (dominated by Tamils and Muslims) had not voted for him he would strive to be president for all Sri Lanka’s people.

Buoyed by the victory, it seems the Sinhala Buddhist majority felt its prospects were boosted: Just before the visit, several Tamil language signboards in Colombo were defaced, prompting Mahinda Rajapaksa to hit out at the vandalism, vowing tough action against those who ‘did not want the President’s India trip to be a success’. There has been no evidence of any sort of outcry in Tamil Nadu about the extent to which New Delhi and Colombo have vowed to cooperate.

On the fishermen issue, Modi said both sides agreed to continue talks and deal with the issue with a constructive and humane approach.

On his part, Gotabaya, terming the talks as “very cordial and reassuring”, said security was an area of major focus and Sri Lanka was looking forward to India’s continued support in intelligence sharing.