Sri Lanka Roundup: India rejects food from Sri Lanka, debt swap deal, Adani Group's bribery probe

India bans food imports from Sri Lanka, other countries

India has implemented a strict food safety protocol, rejecting imports from various countries due to concerns over quality and safety. The Food Safety and Standards Authority of India (FSSAI) has exposed instances of substandard products, notably mouldy areca nuts from Sri Lanka and heavy metal contamination in Chinese sushi. The FSSAI utilises its Food Import Rejection Alert (FIRA) portal to affirm its dedication to public health by rapidly communicating details of rejected food items, derived from a robust three-tier verification process ensuring compliance with safety standards, reports Ada Derana.

Debt swap terms

The Steering Committee of the Ad Hoc Group representing Sri Lanka's bondholders has shown a favourable disposition towards the country’s debt restructuring terms concerning approximately $12.55 billion in sovereign bonds. The committee incorporates major asset management entities like BlackRock and Morgan Stanley, advocating for a collaborative approach with the Local Consortium of Sri Lanka. According to Ada Derana, since the 2022 default, the Ad Hoc has worked with Sri Lankan authorities to establish restructuring agreements aligned with an IMF-supported programme, which introduces innovative financial instruments like Macro-Linked Bonds and Governance-Linked Bonds.

Adani Group scandal probe

An investigation has been launched by Sri Lanka's government regarding the Adani Group's wind power project worth $442 million amidst bribery allegations against its founder. Under the auspices of President Anura Kumara Dissanayake's administration, the review of this infrastructure project is indicative of a broader initiative to combat corruption and recover misappropriated assets. The Adani Group has refuted the allegations, branding them as unfounded, as reported by My News.

$14.2 billion debt restructuring agreement

In a move to solidify its financial standing, Sri Lanka has ratified a $14.2 billion debt restructuring agreement that was initiated by the previous government, aimed at achieving the debt sustainability necessary for compliance with the IMF. Following a provisional agreement with the IMF for a further tranche of its ongoing bailout, this restructuring will see the exchange of new bonds for existing liabilities. The current administration is keen on continuing these frameworks, anticipating further negotiations with other nations to ensure sustainable debt by year-end, according to Business Standard. Presently, Sri Lanka's external debt totals $37 billion, with substantial portions owed to international creditors.

Entrepreneurship rate low

The National Enterprise Development Authority (NEDA) revealed that only 3 percent of Sri Lanka’s working population is involved in entrepreneurship. NEDA Director Dhanuka Liyanagamage described this figure as “pathetic” compared to regional peers and emphasised the need to promote entrepreneurship more widely. He noted that parents and universities in Sri Lanka rarely encourage entrepreneurship, focusing instead on job opportunities. Despite this, Liyanagamage acknowledged progress since the 2022 crisis in recognising the importance of entrepreneurs for national development. He stressed the need to increase the entrepreneurship rate to at least 10 percent within the next 3-5 years and highlighted bureaucratic red tape as a major obstacle that the new administration must address, as reported by Killer Startups.