Prime Minister Narendra Modi on Friday extended $400 million credit to Sri Lanka to strengthen its economy, ANI reported. Modi announced this during a joint press conference with Sri Lanka’s newly elected President Gotabaya Rajapaksa. He arrived in New Delhi on Thursday on a three-day visit to India.

Modi also said that India will extend $50 million line of credit to Sri Lanka to fight terrorism and $100 million for solar projects. “Under Indian housing project, 46,000 houses have already been made in Sri Lanka,” he added. “14,000 houses [are] further being made for Tamil origin people.”

The prime minister said India and Sri Lanka share a strong bond. “We give priority to our relations with Sri Lanka under our ‘Neighbourhood First’ policy,” he said. He added that the mandate given by people of Sri Lanka in the General Elections signifies the ambitions of a strong country. “A strong Sri Lanka is not only in the interest of India but that of the entire Indian Ocean region,” Modi said.

Modi said both the leaders exchanged their views on the post-war reconciliation process of the Tamil people in Sri Lanka. He hoped that Rajapaksa will ensure “equality, justice, peace and respect” to Tamils. Rajapaksa said his government will take steps to release boats in their custody after a meeting with Modi.

Earlier in the day, Rajapaksa said that his country needed to work with New Delhi to address security and development-related matters, PTI reported.

“My expectations are very high [for the visit],” Rajapaksa said. “I want to bring the relationship between India and Sri Lanka to a very high level.”

Rajapaksa received a ceremonial reception at Rashtrapati Bhavan in Delhi. He was later received by President Ram Nath Kovind and Prime Minister Narendra Modi.

Modi and the newly elected Sri Lankan president met at the Hyderabad House.

After receiving Rajapaksa, Modi tweeted: “Happy to receive Gotabaya Rajapaksa on his first overseas visit as the President of Sri Lanka. His visit is a testimony to the time-tested ties between India and Sri Lanka and will help strengthen our bonds as well as energise our partnership.”

In an interview on Tuesday, Rajapaksa had noted the significant role played by the Indian Ocean in the current geopolitics. He observed that Sri Lanka was positioned in a very strategic place as all the sea lanes were close by. The lanes should be free of control of any one country, the president had said.

On Friday, Rajapaksa also met External Affairs Minister S Jaishankar to discuss bilateral and regional matters, officials said. Sri Lanka’s Foreign Secretary Ravinatha Aryasinha and Treasury Secretary SR Attygalle accompanied Rajapaksa for the three-day visit.

Rajapaksa had said on Tuesday that his administration will work together with India and China, and does not want to get caught “in between the power struggle of superpowers”. “We understand the importance of Indian concerns so we cannot engage in any activity that will threaten the security of India,” he had said.

Following Rajapaksa’s electoral win, Modi was among the first world leaders to wish him. He had said that he looked forward to working closely with the newly elected president for closer ties and “peace, prosperity as well as security” in the region.

Following the Sri Lankan civil war in 2009, Rajapaksa was charged with human rights offences, but he has denied the allegations. The president is considered a national hero by the Sinhalese majority for winning the 26-year-long armed conflict with the Tamil separatists. However, he remains deeply unpopular among the Tamil and Muslim communities.

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