Ideal time for Indian entities to invest in Sri Lanka: Minister Semasinghe

The Sri Lankan economy is stabilising faster than previously anticipated and it would be an ideal time for India to invest in the island nation, State Minister of Finance Shehan Semasinghe said ahead of an industry event here on Friday.

The minister said Sri Lanka has completed its debt optimisation programme approved by Parliament and in the next couple of weeks, it may conclude the process.

"Our economy is stabilising faster than we anticipated. We are confident that with all the reform agenda in place, the economy will start growing by 2024," Semasinghe said here ahead of an industry event "Invest Sri Lanka".

The event is hosted by the Confederation of Indian Industry (CII) in collaboration with the Colombo Stock Exchange (CSE).

"Invest Sri Lanka" is a series of fora to promote foreign portfolio investment into the Sri Lankan Stock Market by showcasing investment opportunities in leading Sri Lankan-listed companies, according to a CII statement.

The events are being held in key foreign markets, including the UK, the US, Australia, New Zealand, the UAE, India, Switzerland, Hong Kong, and Singapore, it said.

"We have completed the first step required for the debt restructuring by getting approval from Parliament. In the next couple of weeks we may conclude the DDO (Domestic Debt Optimisation) process. We are bouncing back strongly," he said.

About the initiative and Sri Lanka's potential to attract foreign portfolio investments, he said, "Sri Lanka's strategic location is ideal for investors in India. Excellent shipping links to both the west and the east coasts of India, combined with robust logistic operations create a high-value proposition for many sectors."

"Indian rupee is now a designated currency in Sri Lanka. Besides, Sri Lanka is also looking at deepening engagements with India in many sectors, such as energy, transport and connectivity," he said.

"In July this year, a Memorandum of Understanding (MoU) was signed between the two countries on renewable energy cooperation and discussions were also held on electricity grid connectivity. This will help Sri Lanka reduce the cost of generating electricity, which would substantially improve economic competitiveness," he said.

"Inflation returning to single-digit levels and strong institutional and legislative reforms led to declining interest rates, creating opportunities in both equity and fixed income markets," the minister said.

"Thus, in short-term, there will be clear investment opportunities in sectors such as tourism, logistics and renewable energy, and in export manufacturing, technology and value-added agriculture in the long-term," he said.

We are looking forward to having investments in different areas where the government has its priorities. There are different avenues opening in Sri Lanka... and we have shown a lot of transparency in our government structure," he said.

"Further, we are looking at establishing a vibrant and green economy with digitisation. Thus, this would be an ideal time for investors from India to invest in Sri Lanka," he added.