India today signed an agreement with Sri Lanka to provide USD 318 million as line of credit to develop the island nation's railway sector, officials said. The agreement was signed by RHS Samaratunga, Secretary, Ministry of Finance and Mass media, and David Rasquinha, Managing Director of India's Export-Import Bank in Colombo.

During his first visit to Sri Lanka as prime minister in 2015, Narendra Modi had declared a line of credit of USD 318 million for the development of Sri Lanka's railway sector. That visit, the first standalone bilateral visit by an Indian prime minister since 1987, had come in the backdrop of increasing Chinese presence in the Indian Ocean nation. China has been investing heavily in Sri Lanka, developing mainly ports that could potentially be used as a base for its navy, though Beijing says the investments are part of its Belt and Road Initiative that aims to link it with Europe and Africa via the Indian Ocean.

Related news: Sri Lanka Growth to Accelerate in 2017, Sri Lanka and South Korea Strengthen Ties