India has converted 100 million dollars of loans into grants, visiting Prime Minister Narenda Modi said in Colombo, effectively writing off the debt.
“In the last 6 months alone, we have converted loans worth more than 100 million dollars into grants,” Prime Minister Modi said at a briefing with President Anura Dissanayake at the Presidential Secretariat in Colombo.
Sri Lanka defaulted on its foreign debt in 2022 after extreme macro-economic policy inflation flexible inflation targeting and potential output targeting, shattered the balance of payments.
About 1,366 million dollars of Indian debt, not counting interest in areas was included in debt slated to restructure.
Bilateral debt of Middle Income countries are usually restructured by extending maturities and reducing interest rates. However, India has written off 100 million dollars of debt to Sri Lanka.
India had concluded revised debt agreement or ‘bilateral amendatory agreements on debt restructuring’, the Indian High Commission said.