India has extended a $1 billion credit line for Sri Lanka by one year, a Sri Lankan official told Reuters on Tuesday, giving the crisis-hit country a backup infusion of dollars for essential imports.

The credit line, part of about $4 billion in emergency assistance extended by India during the peak of Sri Lanka's financial crisis early last year, was scheduled to end in March.

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Post-negotiations, the credit line was extended until March 2024, said Sri Lanka's Deputy Treasury Secretary Priyantha Rathnayake.

"There is about $350 million left of the credit line that can be utilised as needed," he told Reuters.

"However, given the increase of foreign exchange availability in the market, the need is not as keen as it was last year."

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