Prime Minister Narendra Modi announced, on Friday, after talks with the island nation’s new President Gotabaya Rajapaksa that India will lend Sri Lanka 400 million dollars for infrastructure projects.
The loan is aimed at improving bilateral ties.
Sri Lanka, located off the southern tip of India, has become an arena of competing for influence between New Delhi and China.
Rajapaksa was on his first visit to India after a sweeping election victory earlier this month won on a platform promising to pull the country out of its deepest economic slump in more than 15 years.
Rajapaksa, Sri Lanka’s former wartime defense chief, told reporters he wanted to take bilateral ties with India to a “very high level”.
Modi said India would provide Sri Lanka with 50 million dollars for its security needs in addition to the 400 million dollars for infrastructure.
“India is fully committed to the development of Sri Lanka,” he said.