India is active in a number of areas of development activity in Sri Lanka. About one-sixth of the total development credit granted by India is made available to Sri Lanka.
In the recent past, three lines of credit were extended to Sri Lanka: US$100 million for capital goods, consumer durables, consultancy services and food items, US$31 million for the supply of 300,000 MT of wheat and US$150 million for purchase of petroleum products. All of the lines of credit have been fully used. Another line of credit of US$100 million is now being made available for rehabilitation of the Colombo-Matara railway.
A number of developmental projects are implemented under the aid to Sri Lanka funds. In 2006–07, the budget for the aid to Sri Lanka was Rs 28.2 Crs. A memorandum of understanding on Cooperation in Small Development Projects has been signed. Projects for providing fishing equipment to the fishermen in the East of Sri Lanka and solar energy aided computer education in 25 rural schools in Eastern Sri Lanka are under consideration.
India has supplied medical equipment to hospitals at Hambantota and Point Pedro, supplied 4 state-of-the- art ambulances to the Central Province, implemented a cataract eye surgery programme for 1500 people in the Central Province and implemented a project of renovation of OT at Dickoya hospital and supplying equipment to it.
The projects under consideration are the construction of a 150-bed hospital at Dickoya, upgrading of the hospital at Trincomalee and a US$7.5 million grant for setting up a cancer hospital in Colombo. India also contributes to the Ceylon Workers Education Trust that gives scholarships to the children of estate workers.
A training programme for 465 Sri Lankan Police officers has been commenced in Dec 2005. Another 400 Sri Lankan Police personnel are being trained for the course of Maintenance of Public Order.
Indian governments have also showed interest in collaborating with their Sri Lankan counterparts on building tourism between the two countries based on shared religious heritage.
The Madhya Pradesh CM Shivraj Chauhan in June 2013 stated that he was working with Sri Lankan authorities to build a temple dedicated to the Hindu deity Sita in Nuwara Eliya. In November 2019, Prime Minister Narendra Modi stated that India will invest $400 million in infrastructure projects in Sri Lanka amid improving ties after the talks with Sri Lanka’s new President Gotabaya Rajapaksa. It was also stated that it will lend Sri Lanka $400 million for infrastructure projects, India-Sri Lanka border crossings.
