Lanka-India trade to hit US$ 900 m
The Sri Lankan Government has set a target of $3 billion FDI inflow
into the country by 2015, of which 15-20 percent is expected from India.
The trade between the two countries is expected to touch $900
million, said Sam Wijesekara, Counsellor (Commercial), Sri Lanka Deputy
High Commission in Chennai.
The island has attracted FDI worth $516 million from various
countries during January-October this year. The Sri Lankan Government
granted approval to nine Indian projects with an estimated investment of
$168 million (around Rs. 756 crore).
Since the end of 25 years of terrorism in 2009, the country has been
working to improve the investment climate, including making fiscal and
tax reforms under the guidance of the International Monetary Fund.
In 2005, FDI flow from India to Sri Lanka was $18 million, which
peaked in 2008 at $126 million and now India stands among the top five
investors in Sri Lanka, with $ 457 million on a cumulative basis.
The top investments include Cairns India - oil exploration, Bharti
Airtel, Indian Oil, Piramal Glass, Tata group - Tata Communication, Taj
Hotel, Ashok Leyland, Ultra Cement, Ceat, L&T and Asian Paints. Besides,
four banks - State Bank of India, Indian Overseas Bank, Indian Bank and
ICICI also have branches in the island nation, said Wijesekara.
During the first half of 2011, FDI inflow from India was $47 million,
according to the Sri Lanka Board of Investment (BoI), which added that
during January-October this year, the Sri Lankan Government granted
approvals to nine Indian projects with an estimated investment of $168
million. At least eight of these have begun commercial operations. This
is a big jump as last year, approvals were granted for 15 projects with
an estimated investment of $ 72 million.
The investment flow from India to Sri Lanka in 2009 was $77 million
and increased to $110 million in 2010.
Companies, which have recently entered Sri Lanka include Shriram EPC,
a renewable energy company and Marg, an infrastructure company from
Chennai.
According to Wijesekara, real estate, IT/BPO, hotels and food
processing are some of the key sectors driving the investments into Sri
Lanka from India.
The last few years have also witnessed an increasing trend of Sri
Lankan investments into India, said Wijesekara. He added, the
investments in India include Carsons Brandix (around $ 1 billion to set
up a garment city in Visakhapatnam), MAS Holdings, John Keells, Hayleys,
and Aitken Spence (Hotels). There are also investments in the freight
servicing and logistics sector from the services industry.
Business Standard India
|