Sri Lanka Considers Indian Rupee as Local Currency in Effort to Boost Trade and Tourism
In a move aimed at facilitating transactions and boosting trade between Sri Lanka and India, Sri Lanka is considering allowing the usage of the Indian rupee for local transactions. Just like the dollar, euro, and yen, the Indian rupee will be accepted as an official currency in Sri Lanka. This decision comes as a way to accommodate the growing number of Indian tourists and businessmen who visit Sri Lanka, eliminating the need for multiple currency conversions.
This move is part of a broader effort to forge stronger commercial linkages between the two countries. Sri Lanka and India have recently agreed to operationalize the Unified Payments Interface (UPI)-based digital payments to further enhance trade and transactions. To facilitate this, the two countries signed the Network to Network Agreement between NIPL and Lanka Pay, allowing for UPI application acceptance in Sri Lanka.
Interestingly, Sri Lanka believes that China would not object to the Memorandum of Understanding (MoU) signed with India for the development of Trincomalee as a regional hub. Both Sri Lankan and Indian leaders have emphasized the significance of port connectivity between the two countries and discussed ways to mutually benefit through collaborations between governments and the private sector.
Furthermore, the possibility of Sri Lanka benefiting from the economic development in the South Indian region was also considered. The leaders agreed on establishing port connectivity between Colombo, Trincomalee, and the South Indian region. To explore this further, necessary studies will be undertaken to assess the feasibility of building a bridge for land connectivity or continuing with existing ferry services.
In addition to trade and connectivity, the discussion also touched upon the potential involvement of an Indian university to assist in Sri Lanka’s digitalization efforts. The leaders recognized the importance of digitalization and explored the possibility of leveraging the expertise of an Indian university to further advance Sri Lanka’s digital initiatives.
Overall, these developments signify the willingness of both Sri Lanka and India to strengthen their economic ties and create a conducive environment for trade and tourism. If implemented successfully, the acceptance of the Indian rupee as a local currency will not only simplify transactions but also provide a boost to the tourism and trade sectors in both countries.
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