Crisis-ridden Sri Lanka has identified seven classes of products, aside from petroleum, to be imported from India this year under credit facilities, according to Indian media reports.
The product classes include essential food items, medicines, cement, textiles, animal fodder, raw materials for key industries, and fertilizers.
In line with this, Sri Lanka importers are placing their goods requirements with Indian suppliers. Indian exporters are required to approach State Bank of India, which has signed an agreement to extend $1-billion credit line to the island nation, for payment.
Given that Sri Lanka is going through its worst financial turmoil since 1948, triggered by a forex crisis, it needs to limit imports to critical essential items.
The island nation has been seeking an extra $2 billion line of credit to tide over the disaster. India has already supplied $1.5-billion credit lines since January. These include $1 billion for imports of essential food items, drugs, and other essentials, and $500 million for petroleum imports. On top of those, India’s RBI has entered into a $400-million RBI currency money swap with its Sri Lankan counterpart and further, it has deferred $500 million ACU payment.
New Delhi’s main exports to Colombo are petroleum merchandise, prescription drugs, metal, textiles (primarily cloth and yarn), food items, and vehciles.