Exporters Worried About Stuck Payments As Sri Lanka Declares Economic Emergency

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Exporters Worried About Stuck Payments As Sri Lanka Declares Economic Emergency

Indian exporters are worried about their payments getting stuck as Sri Lanka has declared an economic emergency to control spiralling food prices and declining foreign reserves. While India’s exports and imports may be the first to be affected by the crisis in Sri Lanka, its investments in development projects and areas such as petroleum retail, tourism & hotel, manufacturing, real estate, and financial services may also take a hit if the situation worsens, say experts. “From the last one year, we have seen Sri Lanka curbing imports of non-essentials such as vehicles, which has almost stopped. However, export of most essential items from India is continuing. But now the problem has got aggravated as a lot of Indian exporters who have already exported have not received their payments. They are worried about when the payment would come,” said Ajay Sahai, Director General, Federation of Indian Export Organisations (FIEO). Sri Lanka’s economic woes are partly due to the Covid-19 crisis which affected tourism which is one of the primary source of foreign currency earnings. Its mounting foreign debt crisis is seen by many economists as one of the main underlying reasons for the situation. A ban on use of fertilisers by the Sri Lankan government, who wants agriculture to turn totally organic, may have made matters worse.