The foundation stone for the Handicrafts Village at Hambantota was laid by H.E. Y.K. Sinha the High Commissioner of India and Hon. Douglas Devananda, Minister of Traditional Industries and Small Enterprises Development, at a brief ceremony held in Hambantota on 23 October 2013. Mr. R. Raghunathan, Consul General of India, Hambantota, Mr. Sivagnanasothy, Secretary to the Ministry of Traditional Industries, Mr. Buddhi Keerthisena, Chairman of the National Crafts Council and several other senior government officials participated in the event.

The Project, to be implemented at a cost of SLR 20 million, is expected to be completed by February 2014. It is expected to assist a large number of craftsmen in Hambantota, who are engaged in producing traditional handicraft items using raw materials from sea-shells, cane, pottery and wood carvings, but do have not adequate avenues to market their produce effectively. The Handicrafts Village will bring together traditional craftsmen and their produce on one side and the customers and tourists on the other, for mutual benefit. The Project is anticipated to provide a welcome boost to the local handicrafts sector and enhance livelihood opportunities for craftsmen in the Southern Province.

In his address at the event, Hon. Douglas Devananda thanked the Government of India for funding this Project. He underlined several other Projects being executed by his Ministry under Indian grant assistance, including the Project to set up the Fishnet Factory in Jaffna at a cost of SLR 166 million and the Project to revive the Industrial Estate at Atchchuvely in Jaffna, at a cost of SLR 220 million, which are expected to improve livelihood and employment opportunities for the youth of the Northern region.

The High Commissioner, in his remarks, emphasized that India and Sri Lanka share a dynamic and multi-faceted relationship, which is rooted in history, language, culture, religion and trade and that the relations between the two countries have matured and diversified with the passage of time, encompassing all areas of contemporary relevance. The revival of employment opportunities and restoring livelihoods of the people has been an important priority of India's development assistance projects in Sri Lanka. The Handicrafts village in Hambantota is one of the many initiatives undertaken by the Government of India to promote livelihood opportunities in the conflict-affected areas as well as in other parts of Sri Lanka.

The Government of India has been implementing a variety of multi-sectoral projects in Sri Lanka based on the needs and priorities identified by both countries. India's portfolio of development projects now encompasses virtually all major sectors of the economy, including housing, infrastructure, education, health, agriculture, fisheries, industry, handicrafts and culture. The scope and scale of these projects has increased exponentially since the end of the armed conflict in 2009. The Government of India has implemented grant-assisted projects alone worth SLR 20 billion during the past four years, in addition to other projects funded by lines of credit. In the Southern Province, the project to restore the Southern Railway line (118 km) from Kalutara to Matara, which was damaged by the Tsunami, was completed ahead of schedule using an Indian line of credit.

The Indian Housing Project involving construction of 50,000 houses through grant assistance is the flagship Project being implemented in Sri Lanka at an estimated cost of US$ 272 million. The second phase of the Project, involving for construction of 43,000 houses under the owner-driven model, is progressing well. 4,000 houses have been completed till date and another 12,500 houses are in different stages of construction. Till date, SLR 7 billion has been released as grant assistance to the beneficiaries selected under the Project. Earlier this month, during the visit of Hon. Salman Khursheed, the External Affairs Minister of India, to Colombo on 7-8 October 2013, agreements were signed for implementation of the Sampur Thermal Power Project in Trincomalee. India has committed a concessional line of credit amounting to US$ 200 million, to finance the equity share of CEB and the transmission lines and other infrastructure associated with the power plant.