Context:

• According to experts, amidst the pandemic and time for polls in Sri Lanka, both India and China have diverse avenues to deepen.

Background development:

• Despite having watched the India-China stand-off at Galwan Valley closely because two of its closest partners were on either side of the tension, Sri Lanka did not comment on the development.
• India was facing East Container Deal with the Sri Lanka.
• Around the same time, India was holding close and constructive discussions with Sri Lanka, on Colombo’s pending request for a debt totalling $960 million freeze, and for swapping currency under bilateral and SAARC arrangements.

Indian Deal:

• The Reserve Bank of India has agreed to a $400 million currency swap facility for Sri Lanka till November 2022.
• Sri Lanka owes $960 million to India.

Reference: https://www.thehindu.com/news/international/india-sri-lanka-seek-to-reset-ties-in-the-time-of-polls-and-pandemic/article32186042.ece

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