Ports to UPI to green energy, India and Sri Lanka deepen economic ties

Source: The post is based on the article “Ports to UPI to green energy, India and Sri Lanka deepen economic ties”  published in Indian Express on 22nd July 2023. 

What is the News?

The President of Sri Lanka has paid an official visit to India. 

During the visit, India and Sri Lanka adopted a ‘vision document’ for a deeper economic partnership between the two countries.

What is the India-Sri Lanka Economic Partnership Vision document?

The vision document has been called  ‘Promoting Connectivity, Catalysing Prosperity: India-Sri Lanka Economic Partnership Vision’.

Aim: To strengthen bilateral and economic partnership between India and Sri Lanka.

Pillars: The document is based on five pillars: maritime connectivity; air connectivity; energy and power connectivity; trade, economic and financial connectivity and people-to-people connectivity.

Key Features of these five Pillars:

Maritime connectivity: The document outlines cooperation in development of ports and logistics at Colombo, Trincomalee and Kankesanthurai, with an aim to consolidate regional logistics and shipping.

– It also talks of resumption of passenger ferry services between Nagapattinam in India and Kankesanthurai in Sri Lanka besides working towards early resumption of ferry services between Rameswaram and Talaimannar.

Air connectivity: Currently, there is a single flight a day between Chennai and the northern Lankan city of Jaffna. 

– The two countries agreed to expand this flight to Colombo as well as explore connectivity between Chennai and Trincomalee, Batticaloa and other destinations in Sri Lanka.

Energy and power connectivity: The two countries have plans to establish a high-capacity power grid interconnection. This is to enable bidirectional electricity trade between Sri Lanka and other regional countries, including those of the BBIN (Bangladesh, Bhutan, India, Nepal) initiative.

– The document also talks of expediting implementation of understanding reached on the Sampur Solar power project and LNG infrastructure and exploring cooperation in Green Hydrogen and Green Ammonia.

– The two countries will also be working on a multi-product petroleum pipeline from India’s South to Sri Lanka.

– They will also undertake a mutually agreed joint exploration and production of hydrocarbons in Sri Lanka’s offshore basins to develop Sri Lanka’s upstream petroleum sector.

Trade, economic and financial connectivity: The two sides will undertake discussions on the Economic and Technology Cooperation Agreement with an aim to comprehensively enhance bilateral trade and investments in new and priority areas.

– They have decided to designate Indian Rupee as currency for trade settlements between the two countries.

– Both sides also agreed to operationalise UPI-based digital payments for further enhancing trade and transactions between businesses and common people.

People-to-people connectivity: The two countries have planned to promote awareness and popularize India’s Buddhist circuit, and Ramayana trail as well as ancient places of Buddhist, Hindu and other religious worship in Sri Lanka for enhancing tourism.