War Lord India's War Loan to Sri Lanka- 100 million US$!

India works on $100 mn soft loan package for Lanka
27 Apr, 2008, 0112 hrs IST,Shantanu Nandan Sharma, TNN NEW DELHI:
Call it an India fund for fighting Tamil Tigers in Sri Lanka. In a step that could have political and diplomatic ramfications, New Delhi is finalising a soft
loan package of $100 million (Rs 400 crore) for Sri Lankan defence department to buy arms and ammunition, sources told SundayET.
Though the island nation does not come under the category of the Least Developed Countries (LDC), India has agreed to extend the loan at a highly confessional
interest rate of just 2%. India normally charges an interest at London Interbank Offered Rate (LIBOR) plus 1- 2% for extending term loans to a country of Sri Lanka’s stature.
Sri Lanka may get another term loan of $100 million for building railway projects, sources added. Significantly, soft loans worth $200 million for Sri Lanka is quite
high when compared with India’s total bilateral disbursement of $500-million soft loans for the entire FY08.
The investment and trade promotion (ITP) division of the ministry of external affairs has been handling the matter so far. No official was willing to comment on this
politically-sensitive matter.
As Sri Lanka will use the resources mainly to combat the Liberation Tigers of Tamil Eelam (LTTE), India’s move has been seen as yet another attempt to eliminate
the Tamil Tigers in an indirect manner. It is expected that the UPA’s powerful ally DMK may not like the idea of India helping Sri Lankan army in such a big way.
Country’s leading defence analyst C Uday Bhaskar said he was in favour of such a move. “In principle, I support such a move. If Sri Lanka, and for that matter
Nepal, need any military help, we should always be the first mover. Otherwise, China, the US or any other country will come and fill up the gap. And in that case, it
will be strategically disadvantageous for us,” he said.
Source: The Economic Times
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India to give $100 million soft loan to Sri Lankan defence: Economic Times
[TamilNet, Monday, 28 April 2008, 07:25 GMT]
Economic Times, one of India's leading business dailies, on Sunday revealed that in spite of possible "political and diplomatic ramifications", the Indian Government
was "finalizing a soft loan package of $100 million for Sri Lankan defence department to buy arms and ammunition." The newspaper went one step ahead and
dubbed this move "the India fund for fighting Tamil Tigers in Sri Lanka."
Citing reliable sources, the newsreport added that India was giving the loan at a "highly concessional interest rate of just 2%" though Sri Lanka did not come under the
category of Least Developed Country which would enable it to secure such a discounted interest.
India was also planning to give another term loan of $100 million to Sri Lanka for railway projects. The combined soft loan amount of $200 million ($100 for defence, $100 for development) was very high compared to India's total "bilateral disbursement of $500 million soft loans" for the entire fiscal year 2008, the Economic Times newsreport said. Moreover, the daily also added that India's move was seen as "yet another attempt to eliminate the Tamil Tigers in an indirect manner."