In a pivotal move aimed at stabilizing Sri Lanka’s economic future, the island nation has finalized a massive USD 930.8 million debt restructuring agreement with neighboring India. This crucial step forms part of Sri Lanka’s broader efforts to navigate its ongoing external debt crisis.
The agreement, which involves a series of bilateral amendments, was signed between the Government of Sri Lanka and India’s Export-Import Bank (EXIM) on two key dates 25 March and 03 April 2025 marking a significant chapter in Sri Lanka’s recovery journey.
The deal covers a total of seven lines of credit and four buyer’s credit facilities that had been previously extended by India. These financial instruments have been revised and restructured under the new terms to ease the burden on Sri Lanka’s strained economy.
Representing Sri Lanka, K.M. Mahinda Siriwardena, Secretary to the Ministry of Finance, Planning and Economic Development, officially signed the agreements. From the Indian side, Nirmit Ved, General Manager of EXIM Bank of India, signed the Line of Credit Agreement, while Amit Kumar, Deputy General Manager at the same institution, executed the Buyer’s Loan Agreement.
India has played a pivotal role in this process as a co-chair of the Official Creditors Committee, a position it shares with France and Japan. This committee has been instrumental in steering negotiations and formulating pathways to sustainable debt solutions for Sri Lanka.
The successful conclusion of these bilateral amendment agreements is expected to serve as a catalyst for enhanced diplomatic and financial cooperation between India and Sri Lanka, reinforcing what has long been a deep-rooted and multifaceted bilateral relationship.
