Neighbourhood First Policy: Indian COVID 2019 Aid to Sri Lanka

Neighbourhood First Policy: Indian COVID 2019 Aid to Sri Lanka

After more than two months of coronavirus-induced lockdown India’s closest neighbour, Sri Lanka, is slowly easing its lockdowns across cities. Following the deadly coronavirus epidemic in Sri Lanka, nearly 1024 have so far been hospitalised, and nine persons succumbed to the disease in the past few months. However, the COVID-19 outbreak has also further slowed down economic growth. Surprisingly, the effects of the pandemic will increase inflation and weaken the Sri Lankan rupee. To overcome the coronavirus crisis, smaller nations like Sri Lanka require massive monetary stimulus packages to revive the economy, when the treasury has little money to spare.

In the moment of difficulty, India, the largest economy and the closest neighbour in the region, is willing to offer short and long term solutions to Sri Lanka. Focusing on improving ties with its immediate Southern neighbour, India's New High Commissioner to Sri Lanka, Gopal Baglay, has said that “Delhi will help Colombo to deal with the Economic Challenges precipitated by the COVID crisis and this is going to be one of my very important tasks”(Wionews, May 2020). The priority areas of India’s assistance are also linked to emergency health support and financial assistance.

Aid Response to COVID-19

Aid diplomacy had been India’s most important foreign policy line, to its  southern neighbour Sri Lanka, during the coronavirus crisis. Particularly at the early stages of the pandemic, India gifted Sri Lanka 10 tonnes of essential life saving medicines including hydroxychloroquine (HCQ) and paracetamol. This consignment was brought to Sri Lanka by an Air India (AI) special charter flight. Of significant importance was the fourth consignment of a 12.5 tonne gift consignment of essential medicines and medical items arriving in Colombo from India by another special Indian Air Force (IAF) flight. Furthermore, India’s envoy-designate to Sri Lanka, Gopal Baglay, travelled on the same flight. Moreover, Sri Lanka's health sector greatly benefited from the four Indian consignments during the pandemic.

Financial Assistance 

In recent years, Sri Lanka has become one of the major recipients of development credit given by the Government of India, (GoI) with total commitment of US$ 2.6 billion (High Commission of India, Colombo, 2017). As for where currency swap agreements are concerned, Sri Lanka’s northern neighbour India is prepared to offer major concessions for the island nation in the coming months. According to the latest reports, Sri Lanka is set to enter into an agreement with the Reserve Bank of India (RBI) for a currency swap worth US$ 400 million, to boost the foreign reserves and ensure the financial stability of the island nation. 

Trade Beyond Aid

If one were to analyse the two way trade and the disruption related to the coronavirus, there are five major areas that are totally affected. Among the five key areas,  Ports and shipping is one particular area that is especially important. For example, nearly 45% of maritime cargo from the Indian sub-continent is transferred through the port of Colombo. The pandemic has affected the maritime supply chains. Secondly, the complex coronavirus situation has the possibility to disrupt bilateral trade flows worth US $ 5.3 billion (Sri Lanka Customs, 2019 ), covering a wide range of economic sectors. If everything goes well in the second half of the year, the two way trade might reach expected volumes. Thirdly, the coronavirus pandemic has forced Sri Lankan and Indian airlines to ground most of their airplanes. In fact, before the coronavirus lockdown, the Sri Lankan air, the flagship air carrier of Sri Lanka, operated more than 126 flights weekly to 14 cities in India, facilitating the flow of people across the two borders. Fourthly, the air connectivity saw increasing number of visitors to the island nation. In 2018, about 424,887 Indians visited the island. Similarly another very important aspect was, the tourists from Sri Lanka are among the top 10 sources for the Indian tourism market. Lastly, grounding flights is not only impacting the airlines sector, but also impacting the travel and tourism industry.

SAARC Diplomacy

s a follow-up to the first ever video conference among the heads of governments of the South Asian Association for Regional Cooperation (SAARC) member nations, India pledged US $10 million for the SAARC Emergency Fund to tackle the deadly respiratory illness outbreak. In addition, Sri Lanka pledged US$ 5 million to the SAARC Corona virus Fund. 

Conclusion

India’s Neighbourhood First Foreign Policy, which had a significant bearing in strengthening the neighbourly relationship between India and Sri Lanka.  Through looking at the bilateral relations between these two nations, it is clear India has established a strong mission to further its relationship with Sri Lanka. Considering the above-mentioned facts turning a new page in the foreign policy, there is significant room for both nations to expand the neighbourly ties to the next level in the post-Covid-19 era.


Pic Courtesy-Srimal Fernando

(Srimal Fernando is a Doctoral Fellow at Jindal School of International Affairs (JSIA), India and Advisor / Global Editor of Diplomatic Society for South Africa. He is the winner of the 2018/2019 ‘Best Journalist of the Year’ award in South Africa, and has been the recipient of GCA Media Award for 2016.In the field of politics, and Policy affairs, Fernando is a specialist, with over ten years of first hand experience in Sri Lanka and the Maldives. The views expressed are personal).