India is on high alert over a Chinese ship en route to Sri Lanka's Hambantota International Port, but Sri Lanka has claimed that the vessel will only be stopping for refueling.
The crisis-hit nation has initiated diplomatic talks with both India and China to reach "an amicable solution" regarding the arrival of the ship to avoid any potential clashes.
Arindam Bagchi, a spokesperson for the Indian foreign ministry, commented on the proposed docking of the Chinese ship, which is expected to be in the port from Aug. 11 to Aug. 17.
Debt Restructuring Talks With ChinaThis came after the International Monetary Fund (IMF) urged cash-strapped Sri Lanka to start debt restructuring talks with its bilateral lender China, while it seeks loan packages from the IMF to offset the country's economic crisis.
Krishna Srinivasan, director of the IMF's Asia and Pacific department, said that Sri Lanka must "engage with its creditors, both private and official bilateral, on a debt workout to ensure debt sustainability is restored."
“China is a big creditor, and Sri Lanka has to engage proactively with it on a debt restructuring,” Krishna said in an interview with Reuters.
Sri Lanka defaulted on its debt in May. The country has $51 billion in outstanding foreign debt, $6.5 billion of which is owed to China.
The country owes $3.8 billion to India and at least $3.5 billion to Japan, according to the IMF.