India pledges $450 m to Sri Lanka’s recovery from Cyclone Ditwah

External Affairs Minister S Jaishankar made the announcement Tuesday morning shortly after he called on President Anura Kumara Dissanayake

India on Tuesday announced a $450-million “reconstruction package” for Sri Lanka to help the island nation recover from the devastating impact of Cyclone Ditwah.

External Affairs Minister S Jaishankar, who is in Colombo as special envoy of Prime Minister Narendra Modi, made the announcement Tuesday morning, shortly after he called on President Anura Kumara Dissanayake.

Posting on social media platform X, the Sri Lankan leader described India’s gesture as “a new chapter” in Indo–Sri Lanka relations and said he conveyed Sri Lanka’s “deep gratitude” to Prime Minister Modi and the Government of India for their “swift, compassionate support”.

India’s post-cyclone reconstruction package includes $350 million worth of “concessional Lines of Credit” and $100 million in grants, targeting sectors most affected in the climate shock incident that ripped through the island in late November, claiming at least 643 lives.

Even as Cyclone Ditwah made landfall on November 28, 2025, India swiftly mobilised its military personnel and resources — who were active for over two weeks on the island — to support Sri Lankan authorities in rescue operations, including in remote, inundated areas.

As part of‘Operation Sagar Bandhu’, the High Commission of India in Colombo sourced and helped distribute humanitarian aid, relief supplies, and medical assistance to augment the Sri Lankan government’s efforts. “The Indian Army set up a field hospital with 85 medical personnel near Kandy, giving emergency care to more than 8,000 people,” Jaishankar said, assuring Sri Lanka that “India stands firmly with Sri Lanka more than ever before”.

Making a media statement alongside Jaishankar, Sri Lanka’s Foreign Minister Vijitha Herath said Colombo deeply appreciated his visit, as it “underscores India’s steadfast solidarity with Sri Lanka” in the aftermath of Cyclone Ditwah. He recalled India’s “unprecedented assistance” amounting to $4 billion, extended through lines of credit for essential goods and petroleum, bilateral currency swaps, and liability deferment, when the island’s economy crashed in 2022, leading to a historic sovereign debt default.

The visiting Indian minister’s trip also included bilateral discussions with the Sri Lankan side, on ongoing and further cooperation. Jaishankar later called on Prime Minister Harini Amarasuriya and met with opposition members, including Leader of Opposition Sajith Premadasa, and Indian business community representatives in Colombo.

Challenging recovery

Following the crippling economic crisis three years ago, Sri Lanka was just beginning to recover — showing tentative fiscal stability with International Monetary Fund support — when the cyclone hit, causing massive losses to life, property, agriculture, fisheries, businesses, and livelihoods. The World Bank has estimated a $4.1-billion loss to Sri Lanka, amounting to about 4 per cent of the country’s GDP, in direct physical damage alone. Some development sector experts in Sri Lanka have observed that the response could be more challenging than after the Indian Ocean tsunami in 2004.

Local and global experts point to the daunting recovery ahead for Sri Lanka, especially amid an ongoing IMF-led programme that imposes painful austerity measures, squeezing ordinary Sri Lankans. Echoing calls from local activists to renegotiate the deal to secure more fiscal space to support the poor, a group of over 100 globally recognised economists and academics have called for the immediate suspension of Sri Lanka’s external sovereign debt repayments.

A recent statement, signed by economists including Joseph Stiglitz, Thomas Piketty, Yanis Varoufakis, Jayati Ghosh, Utsa Patnaik, and CP Chandrasekhar, said the IMF’s Extended Fund Facility, while providing limited debt service relief, “failed to provide a sustainable solution to Sri Lanka’s debt crisis, and left the island extremely vulnerable to external shocks — particularly climate-induced disasters”.

Instead, the experts have proposed a framework that recognises climate-driven disasters as systemic, not exceptional, shocks, provides significant debt cancellation, and prioritises human welfare, environmental protection, and long-term viability over financial obligations to external creditors.

Meanwhile, following Sri Lanka’s recent appeal for additional assistance from the IMF, and the Fund recently approved nearly $206 million in emergency financial assistance under its Rapid Financing Instrument, in addition to its ongoing loans. Sri Lankans concerned about the country’s unsustainable borrowing practices fear that post-cyclone recovery efforts may lead to further debt, impairing meaningful long-term recovery and resilience.

Published on December 23, 2025