July 23, 2024

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Jaishankar may visit Sri Lanka, focus likely to be on resetting of ties

People with knowledge of the situation said on Friday that S. Jaishankar, the external affairs minister, is likely to travel to Sri Lanka even though the two parties have not yet agreed on the trip’s dates.

If the visit occurs, it will provide a chance to repair the damage done to bilateral ties by the Chinese surveillance ship Yuan Wang 5’s stop in Sri Lanka’s Hambantota port in August last year. It will also provide a chance to advance discussions about debt restructuring for the island nation amid an unprecedented economic crisis.

According to some reports, scheduling a visit has been hampered by the Indian side’s jam-packed diplomatic calendar, which includes many incoming trips and the forthcoming budget session of Parliament. Both nations’ governments remained silent on the issue.

Following the trust gap brought on by the Yuan Wang 5’s visit to the Chinese-controlled Hambantota port, which was outfitted with advanced equipment to track satellites and ballistic missiles, the Sri Lankan side has been working to reestablish bilateral relations, according to the sources.

The US and India had opposed the visit of the Yuan Wang 5. The Sri Lankan government first requested that the Chinese side postpone the ship’s arrival, but later reversed course and let the vessel call at Hambantota for refueling.

China tops the list of Sri Lanka’s creditors, accounting for nearly 10% of the country’s $7.3 billion in total foreign debt, followed by Japan ($2.7 billion) and India ($1.7 billion). To fulfil requirements for a $2.9 billion bailout package from the International Monetary Fund, Sri Lanka needs the agreement of China and India, which are not Paris Club members, to restructure its debt.

China is taking its time, so the Sri Lankan side is considering using the “most-favored-nation” clause to allay concerns among Paris Club members that China may be given better terms down the road. If an agreement with China is not struck, the person claimed, the IMF rescue could be postponed. According to the sources, China will be under more pressure to reach a settlement as a result of debt restructuring agreements with India and Paris Club members.