New Delhi: In line with its "neighbourhood first" policy, India stands ready to continue working with Sri Lanka for rapid post-COVID economic recovery, said Ministry of External Affairs (MEA) spokesperson Arindam Bagchi on Thursday.

Replying to a question regarding current developments in Sri Lanka during the MEA briefing, Bagchi said, Sri Lanka is a neighbour and a close friend of India and India is closely watching the developments in the island nation.

"There have been evolving economic situations as well as other developments in Sri Lanka. In order to help mitigate the economic situation, we have extended assistance worth 2.5 billion USD in the past two to three months which includes credit facilities for fuel and food," said Bagchi.

He further informed that India has delivered over 270,000 MT of diesel and petrol to Sri Lanka since mid of March and 40,000 tonnes of rice have been supplied to the island nation under the recently extended one billion USD credit facility.

Speaking on the relationship between India and Sri Lanka, the relationship between the two countries is rooted in shared civilizational values and aspirations of the people, cooperation based on commonality and interest, which has been strengthened in recent months.

"We stand ready to continue working with Sri Lanka for rapid post-COVID economic recovery. This is in line with our neighbourhood first policy and we have already conveyed to them on various occasions our readiness to extend whatever support we can and as has been demonstrated by our actions till now," said Bagchi.

Sri Lanka is battling a severe economic crisis with food and fuel scarcity affecting a large number of the people in the island nation. The economy has been in a free-fall since the onset of the COVID-19 pandemic.

The island nation is also facing a foreign exchange shortage, which has, incidentally, affected its capacity to import food and fuel, leading to the power cuts in the country. The shortage of essential goods forced Sri Lanka to seek assistance from friendly countries.

As New Delhi is providing financial assistance to Colombo, India recently announced another USD 1 billion as a credit to Sri Lanka to help shore up the sinking economy of the island nation. The USD 1 billion line of credit to Colombo will help in keeping their food prices and fuel costs under check.

Last month Sri Lankan President Gotabaya Rajapaksa met Prime Minister Narendra Modi and briefed him on "initiatives being taken by both countries to increase bilateral economic cooperation, and conveyed his thanks for the support extended by India for the Sri Lankan economy."

PM Modi has conveyed to Sri Lankan Finance Minister Basil Rajapaksa, who has visited India twice in recent months, that the latter would always stand with the island nation as it occupies a central role in New Delhi's "neighbourhood first policy."

In February, New Delhi provided a short-term loan of USD 500 million to Colombo for the purchase of petroleum products through the Ministry of Energy and the Ceylon Petroleum Corporation on behalf of the Government of Sri Lanka. In November 2021, India had given 100 tonnes of nano nitrogen liquid fertilisers to Sri Lanka as their government stopped the import of chemical fertilisers.