INSUBCONTINENT EXCLUSIVE:
The Indian government is working on operationalizing Rupee investments in Sri Lanka in a move to boost Indian investments in its southern
neighbour, two people aware of the matter told Mint.Rupee investments will ease the way for Indian firms to enter the Sri Lankan markets,
the people mentioned above said, speaking under the condition of anonymity.During FY 2023, the Reserve Bank of India (RBI) allowed invoicing
and payments for international trade in the Indian Rupee.This allowed exports and imports to be denominated and invoiced in Indian rupees,
especially Indian exports, apart from systematically internationalizing the currency
India wants the Indian Rupee to be a hard currency in the future, the second person mentioned above said.Last year, Sri Lanka notified the
Indian Rupee as a designated currency, which enabled trade between the two countries to be settled in the currency and also allowed tourists
visiting the island-nation to use the currency for transactions.India now hopes to work with Sri Lankan to make it easier for Indian firms
to enter the Sri Lankan markets
with Sri Lanka in recent years.India is a key partner of Sri Lanka, playing a pivotal role in its recovery from the economic crisis that
started in 2019 and threatened to derail the economy of the South Asian nation.The crisis that peaked in 2022-23 saw spiralling inflation,
emptying of foreign exchange reserves, and shortages of basic commodities.While the IMF extended assistance of $3 billion, India gave an
arrangement and deferred import payments.India and Sri Lanka also unveiled a slew of connectivity initiatives during President Ranil
These include proposals for a petroleum pipeline, power grid linkages, a land bridge and a comprehensive Economic and Technology Cooperation
Agreement (ETCA).On 19 February, Mint reported that the ETCA deal is expected to be finalized in FY25, with negotiations in advanced
mentioned above said.Major Indian corporate houses have invested in Sri Lanka
For instance, the Adani Group is developing the West Container Terminal in Colombo Port, for which it received $553 million from the US
sector, according to reports.There is a vision to make Indian currency into a hard currency in the coming years, which will enable it to
said.Source: Mint--Agencies
