High Commission of India
Colombo
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Transcript of Special Briefing by Foreign Secretary on the visit of President of Sri Lanka to India (July 21, 2023)
Shri Arindam Bagchi, Official Spokesperson: A very good afternoon to all of you. Thank you for joining us for the special media briefing on the occasion of the visit of the Honorable President of Sri Lanka. To give us a sense of the visit and the talks that are just concluded in Hyderabad House with Honorable Prime Minister, we have the pleasure of having with us Foreign Secretary Sir, Shri Vinay Kwatra. Also joining us on the dais, Shri Gopal Baglay, our High Commissioner to Sri Lanka as well as Shri Puneet Agarwal, Joint Secretary in the Indian Ocean region division of the Ministry. Sir may I hand over the floor to you.
Shri Vinay Kwatra, Foreign Secretary: Thank you, Ambassador Gopal, Arindam. Thank you friends from the media to be here this afternoon on this special briefing relating to the ongoing visit of the Sri Lankan President Ranil Wickremesinghe to India. President of Sri Lanka Excellency Ranil Wickremesinghe arrived last evening and is set to depart from Delhi later this evening. His program in Delhi since his arrival yesterday has included a call on by Dr. Jaishankar last evening, call on by the National Security Advisor earlier this morning and had restricted and delegation levels discussion with the Honorable Prime Minister, which concluded just a little while ago, which was followed by one-to-one lunch between the two Leaders. Excellency, the President of Sri Lanka will be calling on the Honorable President of India later this afternoon before his departure from India for his return to Sri Lanka. In terms of the substance of the discussions and the outcomes which resulted from the visit you would have all hopefully watched the deliberations relating to the exchange of agreements and also the press remarks by the two Leaders thereafter. The Honorable Prime Minister and President of Sri Lanka during their discussions reviewed the entire spectrum of our bilateral relations and both acknowledged that the partnership and our cooperation has been a source of great strength in overcoming the recent difficulties and challenges in Sri Lanka. They also outlined...the two Leaders also outlined a common vision of theirs to further develop the bilateral relationship in coming years, centered around enhanced extended and deepened connectivity and deeper economic partnership. The essence of specifics of what the vision of connectivity related future partnership is, it is captured and reflected in a comprehensive joint vision document which is centered on connectivity that both the Leaders have agreed upon and it covers various dimensions of connectivity, maritime, air connectivity, energy connectivity, power trade and economic connectivity, financial connectivity, digital connectivity and also resulting people-to-people engagement. The document is available in the public domain and we would encourage our friends from the media to refer to this document for more specifics of the vision that the two Leaders have in structuring the India Sri Lanka partnership based on that.
Under the Neighborhood First policy which was enunciated by Honorable Prime Minister Shri Narendra Modi ji, the two Leaders...under the directions of the two Leaders, the two sides also finalized a series of documents, important documents covering crucial areas of economic cooperation. The first was the MoU on renewable energy. The focus of this MoU is essentially on two aspects. One, relating to the specific cooperation in wind, solar segments of renewable energy but also on establishing high-capacity, inter-grid connectivity in the power sector between India and Sri Lanka. The second one relates to the Trincomalee, where both Leaders underscored the need to build upon the advantages that have already accrued from the agreement on the Trinco tank farms, the agreement of 2021 and through the MoU exchange today, both sides agreed to develop Trincomalee as a regional hub for industry energy, including renewable energy and economic cooperation. A crucial element of connectivity particularly the maritime connectivity were discussions that were focused on resumption of passenger ferry services between India and Sri Lanka. In this connect both sides are looking at connecting Nagapattinam in India with Kankesanthurai in Sri Lanka. This flows from the earlier cooperation on infrastructure development that has already been undertaken in Kankesanthurai through the line of credit from India. Another key element, again a part of our connectivity centered partnership, was to explore air connectivity from southern India to Trincomalee, Batticaloa and other destinations in Sri Lanka. You would perhaps all be aware that the increase in frequency of flights between Jaffna and Chennai currently through the Alliance Air currently stands at, I'm told, one flight a day, essentially connectivity throughout the week, every day of the week. Another element which was a highlight of discussion and particularly important in the context of the recent challenges that Sri Lanka has faced and how this segment of cooperation is actually benefited both our countries was the tourism flows from India, which has been a consistent contributor to the economic and forex inflows into Sri Lanka, particularly as I said during the difficult period that the Sri Lanka faced for the last year or so. India is currently the largest source of inbound tourism into Sri Lanka. In this context the Sri Lankan President articulated his future plans for attracting larger number of Indian tourists including through promotion of Ramayana trail as well as Buddhist Hindu circuits and other places of religious worship in Sri Lanka. A key outcome which you would have all noticed related to the digital connectivity and through the digital the fintech connectivity is an agreement reached between NPCI International and Lanka Pay on UPI based digital payments. This has multiple segments that it will feed into, tourism is only one part of it, but it would essentially ease up the payment flow mechanisms between the two countries. Once this understanding is operationalized, I should say within about next two to three months, once the processes relating to its implementation are put in place.
Digitalization and digital public infrastructure and the role these two things can play in the development partnership between the two countries was also an important element of discussion between the two Leaders. Both of them Prime Minister and the Sri Lankan President noted the successful implementation of the ongoing Sri Lanka unique digital identity project, which is being implemented through the Indian grant assistance and would assist and enable the Sri Lankan Government to deliver and host lot of citizen centric services for its people. The other key element that came up for discussion with regard to the ongoing recovery of the Sri Lankan economy, besides of course the substantial Indian assistance that was offered since the crisis broke out in Sri Lanka, related to the role that bilateral trade and investment can play in further speeding up the economic recovery of Sri Lanka. This of course included starting discussions on bilateral economic and technology cooperation agreement and related element on the start of the use of INR for trade settlements which as you know has been ongoing for some time. This year, as you would all know, marks the 200 years of the arrival of the Indian origin Tamil's community in Sri Lanka and to commemorate this significant moment of history Prime Minister announced that Government of India will be implementing a development package exclusively centered for the Indian origin Tamil community. Prime Minister also announced a multi-sectoral package to support the economic development of the eastern province. This will of course be positioned in the larger matrix of India's development partnership with Sri Lanka but would be focused on the development related projects in connect with the Indian origin Tamils. Prime Minister also raised, as you would have all heard him say during his press remarks, also raised the issue relating to the aspirations of the Tamil speaking people in Sri Lanka. He emphasized in this connection the urgent need for the Sri Lankan side to take these groups, in particular the vulnerable sections among them, into confidence as they handle the economic crisis. In this context Prime Minister reiterated our well-known and consistent position regarding the full implementation of the 13th amendment. Both sides also exchanged views on the challenges being faced in dealing with the issues relating to fishermen and fishing boats and also agreed on the need to approach this through a humanitarian perspective. As you all know both sides are also undertaking technical level discussions on specific areas of cooperation in agriculture, fishery development and the sharing of best practices in these aspects. In terms of connectivity projects, another thing which I forgot to mention and I should mention before I conclude, related to the land connectivity between India and Sri Lanka. This idea was proposed by the Sri Lankan President, both Leaders agreed to take this forward and in taking this forward, you would have heard Prime Minister in his press remarks say, that both sides would carry it forward through an initial feasibility study to look at this land connectivity between the two countries which would of course help to bring about economic prosperity to both our societies, also help in regional cohesion with the two countries and can be a source of tremendous bilateral and the regional economic prosperity in our region. I would stop here and if there are questions I'll take them.
Shri Arindam Bagchi, Official Spokesperson: Thank you. As for the ground rules, please introduce yourself and the organization. Let me start with Yeshi.
Yeshi Seli: This is Yeshi Seli from the New Indian Express. Sir, Sri Lanka is cash-strapped. So what is the funding process of all these projects going to be, especially the pipeline project and, you know, the development of ports?
Shri Arindam Bagchi, Official Spokesperson: Aayushi.
Aayushi Gerg: Sir, Aayushi Agarwal from ANI. Sir when it comes to the security interest between the two countries, was there any kind of assurance given by the Sri Lankan President regarding India's concern of Chinese presence in the Indian Ocean? Like we saw last year, this spy vessel docking in the Hambantota Port. So any kind of discussion on that, any assurance given by the President?
Shri Arindam Bagchi, Official Spokesperson: Your part was specific to the?
Aayushi Gerg: Security.
Shri Arindam Bagchi, Official Spokesperson: No.
Aayushi Gerg: The Chinese presence.
Shri Arindam Bagchi, Official Spokesperson: Okay.
Manish Kumar Jha: Manish Kumar Jha from Financial Express. I understand India committed some about $4 billion of economic aid
to Sri Lanka. I would like to know how much has been disbursed to Sri Lanka. And second, if you, Foreign Secretary, could update about West Container Terminal, if there's a concrete deal and status at the moment now. Thank you.
Shri Vinay Kwatra, Foreign Secretary: Sorry, what is the question on the West Container Terminal?
Shri Arindam Bagchi, Official Spokesperson: Sir, of the deal…if there's a deal or not? It's a private sector thing. Sidhant.
Sidhant: Sir Sidhant from WION. Sir what kind of the trade in rupee happening with Sri Lanka? I mean, it was something that was announced or was happening for quite some time. But if you can give us a status update, what kind of investments or exchanges are happening right now when it comes to usage of rupee?
Srinjoy: Sir, Times Now. Was there any discussion on Chinese submarines in Sri Lankan ports?
Shashank Mattoo: Good afternoon, Sir. Shashank Mattoo with The Mint. Sir, there's been talk in the statements about the economic and technological agreement. You also mentioned this. Could you give some sense of what specifically is going to be part of this agreement? Are we looking at tariff reductions? How exactly do both sides want to improve trade? And if I may just tack on a quick question to that, there's also been in the statements a conversation about helping the Sri Lankan Government with its divestment process in terms of the sale of state-owned enterprises. There's been some speculation in the Sri Lankan media that Tata is interested in purchasing or taking a stake in Sri Lankan Airlines, which is the national carrier. Can you comment on that? Is there a sense of what Indian firms specifically all those conversations have been in terms of helping the Sri Lankan Government? Thank you.
Reza: Foreign Secretary, thank you for doing this. Reza from the Hindustan Times. Basically, during the press remarks, the Sri Lankan President also talked about how he had discussed the plan for the Tamil areas and gave some details. Given that there are reports that Tamil Leaders in Sri Lanka themselves have expressed some concerns about the plan, I was just wondering if we could have a little bit more on that.
Shri Arindam Bagchi, Official Spokesperson: Which element? The details of the plan or the reaction?
Reza: The plan and the reaction.
Nayanima: Nayanima from ABP Live. Sir wanted to know also, follow up on the fact that some of the Tamil parties, they have rejected the proposal given by President Wickremesinghe, especially on police pass. Sorry, if I can ask one more. Was there any discussion on the...
Shri Arindam Bagchi, Official Spokesperson: Sorry what was your question?
Nayanima: The fact that the proposal has been rejected by the Tamilian parties there.
Shri Arindam Bagchi, Official Spokesperson: It’s a fact, so what is a question?
Nayanima: I mean, has there been any discussion on the devolution of powers and on defense cooperation?
Shri Arindam Bagchi, Official Spokesperson: Any discussion on defense cooperation and devolution of power? Okay. Sudhi.
Sudhi Ranjan: Sudhi Ranjan from Bloomberg. On the Trincomalee project, Sir if you could give us a dollar figure and also the time frame that we are looking at in developing it into an industrial hub.
Shri Arindam Bagchi, Official Spokesperson: This Trinco MoU that was exchanged today? Okay. I saw one more hand. We will take only one round. So anybody has a question? Yeah Abhishek, go ahead.
Abhishek Jha: Abhishek Jha from CNN News 18. My question is regarding this UPI payment system. When can it start and who all can benefit from this?
Shri Arindam Bagchi, Official Spokesperson: Foreign Secretary mentioned it, but I will ask him.
Shri Vinay Kwatra, Foreign Secretary: I did mention that if all goes well and the systems are put in place, it could take between two to three months.
Rishabh: Rishabh from Times Now. An add-on to what Abhishek has said. Sir, when we talk about UPI set up between India, will private players be allowed to use it or only the Government backed BHIM app we use for the UPI set up between India and Sri Lanka?
Sridhar: Sridhar from the Asian Age. Sir, last year India had given about Rs 30,000 crores in assistance when Sri Lanka was facing the worst. What is the total figure now of the economic assistance since last year? Can you give us the exact figure..what it is? This economic and technological pact, the Sri Lankan President mentioned that it would boost trade and investment. Can you give us some details on how exactly that will happen?
Shri Vinay Kwatra, Foreign Secretary: Sorry, just one second... how exactly will what happen?
Shri Arindam Bagchi, Official Spokesperson: How will trade and investment get a boost from ECT. Chandrakala.
Chandrakala: Sir, Chandrakala from ETV Bharat. Earlier today, there was a meeting between Gautam Adani and President Ranil Wickremesinghe. Can you give us a detail on what exactly... what projects were discussed?
Shri Arindam Bagchi, Official Spokesperson: I am sorry. Have you asked the two parties? We were not in that meeting. It’s unfair to ask us.
Chandrakala: There was a discussion on the WCT. So if you could give us a sense.
Shri Arindam Bagchi, Official Spokesperson: You have to ask the two parties.
Chandrakala: And also one more question on the Manipur situation. We have seen the US Ambassador commenting on that.
Shri Arindam Bagchi, Official Spokesperson: No, this is on the visit. Sorry this is special briefing on visit, I am not getting that question.
Sridhar: Sir just a small quick clarification. This pact, economic and technological pact, is it akin to a free trade? Can you just tell us…
Shri Arindam Bagchi, Official Spokesperson: Sridhar, you need to follow up on previous history. This is not the first time ECTA is coming up. There was an FTA with Sri Lanka. There were earlier rounds of discussions held on the ECTA and now the decision is to resume the negotiations. I will let Foreign Secretary takes these set of question. Anybody else? If not, Sir, I will hand over it to you.
Shri Vinay Kwatra, Foreign Secretary: Yeshi, your first question was on the funding modalities and this in a sense would capture the questions that aim at asking how would ECTA proposals related to disinvestments, trade investment cooperation, how do they fit into the larger metrics of the challenges that the Sri Lankan economy currently faces. Look, as a matter of principle, it is always our effort to ensure that our assistance projects, our development partnership projects, do not add any debt burden on to an existing economy. Naturally, any project which has element of credit in it would have to be positioned correctly in terms of what the debt structuring terms and conditions are for Sri Lanka. Of course that is making an assumption that these projects will be based on the credit. There could be several projects that are non-credit oriented. They are very much developmental in nature, probably have a substantial grant component to them but may also have an additional credit component to it. We should also not overlook the fact that some of these projects can also be through the private sector which has a totally different modality when it interfaces with the Government. But our thrust and the line of effort in implementing our development cooperation with any country and Sri Lanka is no exception. In fact, Sri Lanka is a particularly sensitive case given the fact that the country is currently going through a debt structuring programme. It is going to be our line of effort to ensure that funding mechanisms are structured in a manner that one are determined by Sri Lankan needs, their demands, but at the same time also do not add burden to the Sri Lankan economy.
If I could just draw a tangent and go to the related questions on ECTA which were asked by a few of our media colleagues. How would ECTA help in debt reduction? For example, that was one thought which came. What is going to be the disinvestment process? Is that related to ECTA? For example, that was the second thing asked. Sri Lankan Airlines', interest of Tata is in the Sri Lankan Airlines. That was the third element which came about again in ECTA point and Sridhar, you asked about how exactly would the ECTA modality be implemented. Let me just taking off from the question of funding modality, just link the economic cooperation and trade agreement. As Arindam was hinting, this is not a new discussion in some ways. By their very general nature, the agreements that are related to trade investments, particularly the ones which are not just framework agreements like ECTA might be or besides being a framework agreement, they also have specific chapters or annexes that deal with trade preferences, which means it enables a strong growth of trade in those goods which are preferred for in the ECTA, which also have investment enabling provisions essentially allowing greater flow of capital between the two economies. Naturally, when these two things combine, it helps in an economic growth of a country. Naturally, that would assist as a derivative result, will assist in the reduction of the debt or at least easing of the debt burden on the society. Disinvestment on the contrary is a…normally speaking, how Sri Lanka decides to take it forward is not really for me to answer, but disinvestment is normally a standalone process and in this case, since it is a Sri Lankan disinvestment process, it is something which they need to decide on in terms of which sectors they would go forward disinvesting to within those sectors, which entities would be disinvested, those entities, what would be the terms and conditions of those disinvestments. Naturally, a lot of this has also got to do with their ongoing discussions with the International Monetary Fund. But from our perspective, not just now, even when the crisis broke out, our conversation to them always was that investment rather than credit is always a more sustainable way to move forward in terms of economic recovery. So, I think ECTA needs to be looked at in that perspective, something which allows the economies of the two countries to unlock a huge potential, which means they are embedded in the trade components. Now trade may have specific tariff lines…that is a matter of detail which the negotiators will go into. It would have an investment angle, which again will unlock the economic growth that is inherent in the flow of capital and the investments and other aspects like trade facilitation parts, removal of the non-trade barriers, one can go on. But those are, how should I say, typical components of any such discussion. But it would be wholly inappropriate for me to prejudge as to what those discussions would be, leave alone the outcome of those discussions. So that is the whole rubric of it, but the thrust of this between the two Leaders was that economic cooperation and within economic cooperation, trade and investment partnership has to be a very strong element of our engagement and one of the ways to take that forward is the discussions on the ECTA.
On the question of the Chinese presence and the related elements…thoughts which came out like, for example, I think Times Now had a question relating to Chinese submarine presence and Chinese presence in Sri Lanka was another question…whether the President gave any specific assurance on that and the related elements to that. Look, we are neighbours; we naturally have a very long-standing and comprehensive relationship. When the Leaders of the two countries meet, it is very natural for them to speak about their concerns. When we speak of maritime domain and when India and Sri Lanka sit down, they don't just talk of opportunities that exist of economic partnership in the maritime domain, they also take comprehensive stock assessment of the challenges that they face in the maritime domain. These challenges, the nature of these challenges, the specifics of these challenges in our maritime domain were brought up appropriately during the discussions and you would have heard Prime Minister say in his press remarks also, that the aspects relating to India's security and sensitivity, Sri Lankan side did convey to us their sensitivity and respect for our security and strategic sensitive concerns relating to what happens in our maritime domain. Our challenges that we face in maritime domain are in many ways shared challenges and both sides will continue to monitor developments, naturally closely consult on issues that have a bearing on the security of both countries and particularly India's security and concerns of India's security and sensitivity.
There was a question relating to the disbursement of the 4.1 or 4 billion dollars…I think, from Financial Express. Sridhar also had it. Now, give or take couple of millions here and there, given that you are talking of 4 billion…overwhelming chunk of it has been disbursed. Disbursal has been through many modalities. It was at the very early stages of the crisis through the line of credit on fuel, initially when the crisis began. I think that was in excess of about half a billion dollars, right in the beginning when it started. If you would recall, there were then subsequent crises relating to the supply of essential materials, medicines, food, etc. At that time, Government of India had extended billion dollar credit facility, essentially so that it allows the trade to take place. Normally, as a matter of conventional practice, LOC is not given for trade purposes. It is given for project, but given the exceptional difficulty that the Sri Lankan economy was in, this was extended and has by and large been utilized. There have also been some quantum of credit which goes through initially, but is later on recovered, which is through the currency swap arrangement. I think that is roughly 2 billion plus, if I am not wrong. I think ACU deferments are already roughly 2.5 billion and there is also a currency million swap of about 400 million, which is extended by RBI. Now, 4 billion, when we talk of, is a ballpark figure. It has various components. Some of these are revolving components in a sense that in some cases, the interest payments may come back earlier, but as I said, there is a component of this 4 billion, which is a part of debt restructuring and there is a component which is not part of the debt restructuring. So, the ballpark remains at 4 billion. I would later on request, maybe, Gopal, do you want to add something to this? But what we have also tried to do is that the assistance that we have provided during the times of crisis in Sri Lankan economy, what we have also very proactively done is try to ensure that Sri Lanka gets reasonable terms and conditions through the creditors committee in terms of its debt restructuring. Of course, at the same time, working to ensure that all creditors are offered same terms and conditions and one or more than one creditors do not get terms and conditions which are different from the other creditors. All this with the objective that Sri Lankan economy could come out of the crisis as early as possible, and as I mentioned, crisis are beginning to ease up. But still we have, I think, the second tranche of IMF probably due in September sometime. So, we will see how that part progresses
On the question relating to the West Container Terminal…and I am sure you are aware, it is a private sector investment in Colombo Port. So, you would perhaps be well placed to check those with the entities involved in terms of what the current status of the project is. I just got a slip that I must rush up and leave.
UPI, I think, as I mentioned to Abhishek and to question here, that if all goes well, it should take us another couple of months, two to three months, to put the entire processes in place. But NPCIL and Lanka Pay have arrived at an understanding that would allow this (inaudible). No, it is not restricted to your specific question to a Government defined entity. UPI interface, as you know, is a very broad based interface.
On the Trincomalee, there was a question from Bloomberg. Look, the MoU which has been exchanged today is a framework agreement that would now allow both sides to structure specific infrastructure, investment related, project specific partnerships in the identified zone in Trincomalee. Once that is done, then the dollar quantum proportionately will get allotted to depending upon which projects are agreed to.
On the question of Sri Lankan Tamils, you already heard very clearly what Honorable Prime Minister said in his press remarks. Nothing could be more explicit in terms of what discussions took place, what we put forward, the fact that India continues to look forward to a political solution that addresses the aspirations of the Tamil community, of course aspirations for equality, justice and self-respect within the framework of united and prosperous Sri Lanka. Prime Minister also clearly said that…expressed our belief that a meaningful devolution of powers and the full implementation of the 13th amendment are essential components of addressing and facilitating the reconciliation process in Sri Lanka. This has been our consistent position and this was put forward during the meeting between the two Leaders.
Our trade in rupees, INR Sri Lankan trade in rupees. As you are aware, it started sometime back. The processes are all in place. I am told the initial quantum of trade is already beginning to take place. Some consignments, many several consignments have moved. By its very nature, it is likely to take some time because the currency needs to get fully circulated. Both the currencies need to get circulated into the two economies. But the respective institutions have opened their bank accounts on both sides. The processes are all described set and we would hope that this would pick up momentum very, very quickly.
Shri Arindam Bagchi, Official Spokesperson: Thank you very much sir. My thanks also to Shri Gopal Baglay and to Shri Puneet Agarwal. Thank you all for joining. Good afternoon.
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Colombo
21 July 2023
