Milinda Moragoda said India and Sri Lanka have sort of overcome the fallout of a Chinese surveillance
vessel’s visit to Hambantota port last year.

India and Sri Lanka have been able to address the impact of a Chinese surveillance vessel’s visit to
Hambantota port last year and Colombo is looking to New Delhi to help drive economic recovery
through investments in key sectors such as energy, Sri Lankan envoy Milinda Moragoda said.

We have sort of been able to get over it, but we have to always be vigilant,” he added.

Expressing appreciation for the economic aid of nearly $4 billion extended by New Delhi without any
conditions” for Colombo amid last year’s economic crisis, Moragoda said India had also taken the lead in
providing guarantees to the International Monetary Fund (IMF) to help Sri Lanka access a $2.9-billion
bailout package.

In every way, India led the stabilisation and was the bridge to the IMF,” he said. The reality is that our
social explosion would have been much worse and would have been clearly violent if India had not
stepped in.”

Sri Lanka is keen on Indian investments in key areas, including renewable energy, especially wind and
solar energy in the island’s northwest, development of the Trincomalee oil tank farm as a regional
energy hub, and the Sri Lankan government’s planned divestments in telecommunications, insurance
and hotels, he said. The framework is being set up for a power grid between the two countries, he
added.

A subsidiary of Indian Oil Corporation (IOC) signed a deal with Sri Lanka last year to develop the 850-acre
oil storage facility at Trincomalee with a capacity of nearly one million tonnes. Moragoda said storage of
fuel at the facility will help Sri Lanka’s energy security and there is also scope for building a refinery with
the possible involvement of a third country.

The tourism sector is low-hanging fruit. We need tourism to get the economy moving quickly. India was
the main source of tourists before the pandemic,” he said.

The two sides are also looking at expanding trade through Indian rupee settlements. India has allowed
Sri Lankan banks to open Indian rupee accounts with Indian banks. RuPay would be another possibility
for tourism,” he said, adding there was agreement at the policy level on RuPay and technical discussions
were on to finalise arrangements.

Moragoda, who recently met National Security Adviser Ajit Doval and Chief of Defence Staff Gen Anil
Chauhan for discussions on security issues, said defence cooperation between the two sides has picked
up pace. Sri Lanka currently has about 400 military personnel being trained in India, the highest for any
country, and work is underway on a floating dock being built at Goa shipyard for the Sri Lankan Navy.

Following the supply of a Dornier reconnaissance aircraft to Sri Lanka last year, the two sides are in
negotiations for a second aircraft. India and Sri Lanka are set to hold their annual bilateral defence
dialogue during February 23-25 and there is significant cooperation through the Colombo Security
Conclave that brings together India, the Maldives, Sri Lanka and Mauritius, he said.

We should build towards a strategic dialogue. At the moment, the strategic dialogue happens at the
political level, but over time it could be more structured,” he said. Noting that the Yuan Wang 5 episode
occurred when there was an element of dysfunctionality” in Sri Lanka, Moragoda said the continuing
dialogue with India helped build trust. I think we should develop ways of predicting some of these
things. There may be other unknowns, may not be a ship. It may be something else, but what is
important is an open line of communication, especially in what is essentially an asymmetrical
relationship of India and Sri Lanka,” he said.

Hindustan Times – https://rb.gy/r0x5yx