Connect with us

Business

India, first country to back Sri Lanka’s IMF relief programme – IHC Santosh Jha

Published

on

Dignitaries at the top table

By Ifham Nizam

In overcoming the worst crisis in Sri Lanka’ s history, the country’s neighbor, India, became the leading backer of the International Monetary Fund (IMF) relief programme, India’s High Commissioner to Sri Lanka Santosh Jha said.

“Our desire to work closely with the government and the people of Sri Lanka manifested most visibly during the Covid-19 pandemic and the economic crisis in Sri Lanka in 2022. Our response was driven by our neighbourhood-first policy, which is based on a strong sense of solidarity and an outcome based, non- reciprocal and generous approach, H.C. Jha said at a recent forum held at the Cinnamon Grand, Colombo titled, ‘Colombo Leadership Retreat: Aspire, Achieve, Inspire: Women in Leadership Roles’.

H.C. Jha added: ‘India stood shoulder- to- shoulder with the people of Sri Lanka as a trusted and reliable friend. We provided foreign exchange support as well as helped to source essential items like fuel, food and medicines from India. Overall, we deployed concessional loans and credit facility of around USD 4 billion.

‘I congratulated the All India Management Association (AIMA) for organizing the event to promote dialogue about and between the women leaders of India and Sri Lanka.

‘I am confident that such events will not only bring the peoples of our two countries together and forge deeper economic, social and intellectual exchanges but will help in promoting greater access for women to leadership roles in all sectors and organizations.

‘I am delighted that AIMA has gathered some top business leaders from India and Sri Lanka to address this exclusive event over the next three days. The presence of leaders of the industry such as Mr Pai and Mr Shivakumar here today attest to the importance and seriousness attached to this event.

‘The visit of President Ranil Wickremesinghe to India in July 2023 had created further momentum to the multifaceted partnership. During the visit, our countries adopted a vision document for strengthening India-Sri Lanka ties, centred on enhanced connectivity and promoting a deeper economic partnership. Our governments are closely working together to transform this vision into reality.

‘We are exploring synergies in new areas to achieve our economic and developmental aspirations jointly.

‘India strongly advocated international support for Sri Lanka at various fora. We were the first country to provide financing assurances to the IMF for the Extended Fund Facility programme to Sri Lanka. We co-chaired an Official Creditors Committee with Sri Lanka’s other bilateral creditors to hold discussions on debt restructuring.

`As in other neighbouring countries, development partnership is one of the strongest pillars of our bilateral relationship with Sri Lanka. We are undertaking projects through concessional lines of credit and grant assistance. Our support is to the tune of USD 5 million. We are involved in rehabilitation and modernization of Sri Lanka Railways; construction of houses for the poor; solar electrification of religious places; port development, renewable energy and connectivity, among others. One of the principal vehicles for project implementation has been the high impact community development project. This is particularly useful as it enables us to implement a larger number of relatively smaller projects with high community impact. It also enables us to cover all the different provinces of Sri Lanka, including remote locations and underprivileged sections.

‘Apart from this, India’s private sector is also contributing to infrastructure development in Sri Lanka. The newest addition to Sri Lanka’s skyline, ITC, is built with an investment of about USD 500 million.

`The West Container Terminal at Colombo Port and renewable energy projects in the North are some other shining examples of recent Indian investments in Sri Lanka. These projects are a symbol of the trust that Indian companies repose in the Sri Lankan economy and its people.

‘We are advancing multiple energy connectivity initiatives. These include the power grid connectivity, eventually to enable Sri Lanka to export power to India; the multiproduct pipeline to Trincomalee, which will help advance the Trincomalee Tank Farms and Harbour interests; and we are also working to set up a virtual LNG pipeline from Kochi to Colombo. These are in addition to the power projects that I have mentioned earlier, which along with the NTPC solar power project at Sampur promises to transform the Sri Lankan energy mix and profile.

‘It is well known that India is Sri Lanka’s largest trading partner. In 2022, bilateral merchandise trade between India and Sri Lanka stood at USD 6 billion.

`Our governments have recently resumed discussions on the Economic and Technology Cooperation Agreement, which seeks to further advance our trade and economic partnership beyond the Free Trade Agreement, which came into force in 2000. Once signed, it will help in achieving the true potential of the India-Sri Lanka trade partnership. If we go by the FTA experience, it will enable Sri Lanka to significantly expand its exports both in goods and services to India. This is also our objective in keeping with our Neighbourhood-First policy.

‘India has also been the largest source of investments to Sri Lanka in the past four years. We continue to work to generate greater interest among Indian industries to maintain this trend. Investments in infrastructure, energy, renewable energy, transport and telecommunications, among others, are likely to assist us in this regard.

`In the last 10 years we have emerged from being the 10th largest economy to becoming the 5th largest in the world. We are confident that by 2027-2028, we should emerge as the 3rd largest economy. Riding on economic reforms and various government programmes, such as the production linked incentive scheme, we seem to be on the cusp of a big manufacturing boom in India. However, the biggest stories are from the ongoing digital and green transition in India.

‘Not many in Sri Lanka may be aware that India is the only G20 country that is on track to implement and even exceed its Paris Climate commitments. The Climate Change Performance Index, rates India 10 places above the European Union, which is traditionally perceived as the climate leader. Our national electricity authority projections for 2032, predict that 68.4% of our energy capacity will come from non-fossil sources. We are promoting renewables at a breathtaking speed and also implementing ambitious targets for green hydrogen. Existing investment commitments and ongoing project implementation would confirm that green energy growth in India will maintain its current leadership of the climate agenda. There are of course also India-led initiatives, such as the International Solar Alliance, the Coalition for Disaster Resilient Infrastructure and the Life Initiative that are existing manifestations of our climate leadership.’

Introductory remarks at the forum were made by Rekha Sethi, Director General, AIMA. Welcoming remarks were by T V Mohandas Pai, chairman, Aarin Capital Partners and concluding remarks were by Shiv Shivakumar, Operating Partner at Advent International Private Equity and former chairman, PepsiCo India.



Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Inadequate LPG price hike compels the vulnerable to subsidize the wealthy: Advocata Institute

Published

on

While Advocata Institute welcomes the recent Liquefied Petroleum Gas (LPG) price increase by Litro Gas Lanka, it remains inadequate and indirectly forces Sri Lanka’s vulnerable segments to subsidize wealthier LPG consumers.

This inequity arises because the retail price remains below cost-reflective levels despite the price revision. In April 2026, Saudi Aramco’s Asia-Pacific benchmark rose sharply, adding approximately Rs. 1,000–1,200 to the landing cost of a standard 12.5kg cylinder. The retail price, however, was increased by only Rs. 775, leaving a shortfall of approximately Rs. 225–425 per cylinder.

The gap is currently covered through cross-subsidization, where industrial users are charged higher prices than households. In practice, these costs are often passed on to consumers, as Sri Lanka’s protectionist trade regime allows local companies to do so without losing market share. As a result, households ultimately bear the burden through higher prices on everyday goods.

However, the benefits of this subsidy are concentrated among higher-income households. According to the 2024 Census of Population and Housing, LPG is used for cooking by 42.4% of households nationally, while 55.4% still use firewood. The 2019 Household Income and Expenditure Survey (HIES) further shows that nearly 80% of households in the highest expenditure tier use LPG, compared to less than 8% in the lowest-income tier. As such, the subsidy primarily benefits wealthier households, while its costs are indirectly borne by the broader population – including those who do not consume LPG.

Beyond this inequity, the cross-subsidization model creates two economic risks. First, artificially low prices can discourage conservation and the transition to alternatives such as firewood and briquettes. This sustains LPG demand and contributes to ongoing pressure on foreign exchange reserves. Second, pricing below cost creates an artificial price ceiling. Private sector competitors, unable to match the subsidized prices, risk being driven out of the market. This discourages new entrants and limits investment in the sector.

Advocata Institute urges the government to replace this cross-subsidization model with a fully cost-reflective pricing mechanism. Targeted cash transfers should be utilized to ensure that assistance reaches vulnerable households, while avoiding the inefficiencies of subsidies that disproportionately benefit higher-income groups.

Advocata Institute is an independent policy think tank in Sri Lanka that advocates for economic development through free markets

Continue Reading

Business

People’s Bank donates Rs. 300 million to the Rebuilding Sri Lanka Fund

Published

on

Financial support for housing project for families affected by Cyclone Ditwah

People’s Bank has come forward to donate Rs. 300 million to the ‘Government’s Rebuilding Sri Lanka Fund’ to support the development of a multi-storey housing project in the Nuwara Eliya District, which is being constructed to resettle families affected by Cyclone Ditwah.

This initiative, undertaken in commemoration of the Bank’s 65th anniversary, forms a key component of its Mahajana Mehewara Corporate Social Responsibility (CSR) programme, reinforcing its commitment to supporting communities and promoting sustainability.

The symbolic cheque for the donation was handed over at the Presidential Secretariat by People’s Bank CEO/GM Clive Fonseka and People’s Bank Chairman Prof. Narada Fernando to the Secretary to the President, Dr. Nandika Sanath Kumanayake. Head of Marketing Nalaka Wijayawardana was also present at the occasion.

Cyclone Ditwah, which struck in November 2025, along with the subsequent landslides in the Nuwara Eliya town area, caused extensive damage to residential properties and displaced numerous families. In response, the Ministry of Housing, Construction and Water Supply initiated a permanent housing programme to provide secure and sustainable living conditions. The contribution by People’s Bank highlights the national importance of this initiative and underscores the Bank’s continued role in supporting post-disaster recovery and community resilience.

The proposed development comprises of a fully integrated multi-storey housing complex designed to ensure both comfort and long-term sustainability. The residential component will consist of three multi-storey blocks, offering a total of 120 housing units, with 40 units allocated per block.

In addition to housing, the project incorporates comprehensive infrastructure and community facilities to support a holistic living environment. Planned infrastructure includes internal road networks, dedicated parking facilities, a wastewater treatment plant, and solar-powered outdoor lighting systems. Community-oriented amenities will feature a health centre, day-care centre, commercial outlets, a community centre, a children’s play area, a condominium management office, and a fully operational banking unit. Each block is expected to be completed within approximately a six-month construction period, enabling the timely resettlement of affected families.

Design and consultancy services for the project will be undertaken by the State Engineering Corporation, ensuring adherence to national standards and best practices in construction and urban planning.

As Sri Lanka’s largest bank in terms of customer base and the branch network, People’s Bank has consistently extended its services beyond banking to support impactful CSR initiatives. Guided by its enduring ethos, “Pride of the Nation”, the Bank continues to play a transformative role in uplifting communities and contributing to sustainable national development.

Continue Reading

Business

Hayleys rights issue oversubscribed, reflecting sustained investor confidence in group strength

Published

on

Chairman and Chief Executive Mohan Pandithage

Hayleys PLC, Sri Lanka’s leading diversified conglomerate, has announced that its LKR 9 billion Rights Issue has been oversubscribed by over LKR 2 billion, reflecting strong investor confidence in the Group’s financial strength and growth prospects.

The Rights Issue of 45,000,000 new ordinary voting shares was offered at an issue price of Rs. 200 per share, in the proportion of three new shares for every fifty existing shares held.

The proceeds from the Rights Issue will be strategically deployed through a disciplined allocation of capital intended to fund high-growth, future-focused investments. This strategic move further strengthens Hayleys’ financial flexibility and capital structure, channelling fresh capital into growth-oriented assets while reinforcing long-term stability.

By strategically expanding into the modern trade retail segment and scaling renewable energy projects, Hayleys is diversifying its revenue streams to ensure long-term earnings resilience. The continued strengthening of export-oriented verticals is set to drive vital foreign currency inflows, improving profitability through access to larger international markets. Collectively, these initiatives are engineered to accelerate return on invested capital, ultimately driving sustainable shareholder wealth through long-term value creation.

Hayleys PLC carries a National Long-Term Rating of ‘AAA (lka)’ with a Stable Outlook from Fitch Ratings Lanka Limited, recently reaffirmed, the highest credit rating on the Sri Lankan national scale.

Continue Reading

Trending