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India emerges as third largest investor in Sri Lanka

Next week's scheduled visit of Indian External Affairs Minister Yashwant Sinha to Sri Lanka has been temporarily put off as a result of a no confidence motion to be taken up in the Lokh Sabha against Indian Defence Minister George Fernandez.

Government sources said the External Affairs Minister's presence was needed in the Indian Parliament during the no confidence motion and the visit will take place thereafter.

Meanwhile Cabinet spokesman, Prof. G. L. Peiris said it was a most opportune moment on the eve of the visit of the Indian external Affairs Minister to inform the Sri Lankan public of the range and depth of the relations between India and Sri Lanka. It is a relationship which straddled almost every sector of activity.

He said in 2002, bilateral trade touched US $ 1 billion. India emerged as the largest exporter of goods to Sri Lanka as well as the fifth largest importer. India is now the third largest investor in Sri Lanka with investments of US $ 400 million, in the region. Indian Nationals comprise the highest number of tourist arrivals to Sri Lanka. A statement issued by Prof. G. L. Peiris on Indo-Lanka Bilateral Cooperation said:

Since the UNF Government assumed office, Indo-Sri Lankan relations have grown exponentially. Bilateral ties now are multifaceted and are ever expanding into new, hitherto unchartered, areas. There has been close contact at the highest political levels.

SLPM visited India soon after assuming office. Since then, several Cabinet Ministers have visited India. External Affairs Minister Yashwant Sinha visited Sri Lanka in July 2002 soon after assuming office.

India has consistently supported the peace process initiated by the present Government of Sri Lanka. India is firmly committed to the unity, sovereignty and territorial integrity of Sri Lanka. In this context, India supports a negotiated political settlement which meets the aspirations of all sections of Sri Lankan society.

The US$ 100 million Line of Credit became active post-January 2002. While only US $ 2.34 million worth of rice had been imported into Sri Lanka till December 2001, approvals under the agreement moved significantly in 2003-03 and approvals to date stand at US $ 37.4 million with about US $ 20 million in the pipeline. At the request of the Sri Lankan Government, the repayment terms were further softened from 12 years to 20 years and the grace period was extended from three to five years. The items being procured under the credit line are slowly diversifying beyond transport equipment and covers items as diverse as boilers and injection moulding equipment as well as consultancy services for railways and smart governance.

A special credit arrangement of US $ 31 million for supply of wheat grain from India was signed in July 2002. Three shipments totalling 60,000 MT have already taken place and with monthly shipments of 20,000 MT, full utilization is expected by the second half of 2004.

A programme loan agreement for US $ 20 million was signed in July 2002 as part of the IMF Standby Arrangement.

Indian Oil Corporation entered Sri Lanka through an MoU which envisaged lease of 99 tanks at Trincomalee, entry into the retail petroleum sector and joint venture with CPC for infrastructure storage.

Life Insurance Corporation of India (LIC) re-entered Sri Lanka after a gap of 42 years.

Videsh Sanchar Nigam Ltd., (VSNL) received approval from the Board of Investment and Telecom Regulatory Commission of Sri Lanka to form a public limited company named VSNL Lanka Ltd., for international telecommunication facilities. VSNL has signed an agreement with SLT for microwave link between Talaimannar and Rameshwaram.

India gifted a CT Scanner worth about SLR 30 million to Jaffna Teaching Hospital. Largely driven by the FTA, exports from India to Sri Lanka in 2002 amounted to US $ 831 million; while exports from Sri Lanka to India in the same period amounted to US $ 167.7 million representing a 48% increase in total bilateral trade in 2002 over that in 2001. The trade balance has moved from 8.5 : 1 in 2001 to 4.9 : 1 in 2002. Exports of both countries to the other have increased in this period by 37.5% in case of India and 136.9% in case of Sri Lanka. FTA-I has clearly benefited both India and Sri Lanka as envisaged.

Three rounds of negotiations of the Joint Study Group have been held to prepare recommendations for presentation to the PMs of the two countries for a comprehensive India - Sri Lanka Economic Partnership Agreement (ISEPA). This will see bilateral economic relations achieve a new dimension.

Civil Aviation links between India and Sri Lanka improved significantly over this period. Between 2000 and 2003, the number of Indian destinations to which Sri Lankan Airlines fly has gone up from five to eight, the number of flights a week from 29 to 44 and the seat capacity from 4020 to 4770. Ways of further augmenting capacity are under consideration.

India provided immediate emergency assistance for the floods in the South of Sri Lanka in 2003 and is embarking on provision of relief to repair damaged houses and bridges. Under ITEC and TCS of Colombo Plan, India extends training facilities to Sri Lanka in professional courses, such as engineering, textile, insurance, financial management, plantation management, rural banking and development, railways etc.

There is a separate programme of cooperation for Science and Technology. India has also assisted Sri Lanka through technology transfers, such as setting up an automatic meteorological data-receiving centre in Sri Lanka.

India has contributed to majority of the training of the Sri Lankan Armed Forces. This training is carried out at all levels including officers and other ranks. In the year 2002, a total of 1089 the Indian Armed Forces trained Sri Lankan Armed Forces personnel. The training has been increased by 50% and this year 1510 Sri Lankan Armed Forces personnel will be trained in India. This training in addition to combatants also includes medical personnel, engineers, logistics, management and hydrography. Various prestigious courses have also been offered to the Sri Lankan Armed Forces like the courses in national Defence College and the Defence Services Staff College.

The Palaly runway has deteriorated over the years of operation and is presently suitable only for limited operation. The Indian Government will be carrying out reconstruction of the Palaly. This reconstruction, which is estimated at 300 million rupees is planned to be carried out in three stages which will upgrade it to a fully operation runway for 24 hours operation. The work package will include resurfacing of the runway, runway lighting and repair of the taxi tracks.

India was one of the countries approached by Sri Lanka for urgent relief assistance for the serious floods and landslide that caused devastation in the Southern provinces of Sri Lanka. India reacted within 10 hours sending supplies and relief personnel on board INS Sharda to combat relief operations in the South. This ship which arrived at Galle brought in a search and rescue Chetak helicopter and a team of 33 specialised divers, foodstuff, medicines and other emergency relief. The relief operations were further supplemented by a team of 224 doctors and medical assistants who set up camps in the remote areas of the Southern provinces and treated 15,838 patients.

Regular and frequent cultural exchanges are organized through ICCR. India and Sri Lanka signed a Cultural Exchange Programme in 1977. Indian Cultural Centre is functioning at Colombo.

Ceylon Estate Workers Educational Trust (CEWET) is substantially funded by India to provide scholarships for upcountry Tamil students.

India - Sri Lanka Foundation is functioning in association of the High Commissions of the two countries to promote friendship between the two countries.

India has actively been considering establishment of a District hospital in Hatton, providing teachers in the educational sector for the upcountry and plantation areas as well as the establishment of an Indian Cancer Hospital in Colombo. Efforts are also underfoot to set up a dairy plant in Sri Lanka with the help of the Gujarat Cooperative Milk Marketing Federation Limited (GCMMF).

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