Indo-Lanka bilateral trade crosses $ 4b mark

The removal of 10 items from the negative trade list will help boost Indo-Lanka trade that has already crossed the $ 4 billion mark.

"I commend the steps taken to enhance our exports even with the difficult economic situation in key developed markets. The first among them is the proposal to remove certain items from the negative list for the strategic development of trade," said Industry and Commerce Minister Rishad Bathiudeen in Parliament recently.

In the 2014 Budget, 208 items under the South Asia Free Trade Agreement (SAFTA) and 10 items under the India-Sri Lanka Free Trade Agreement (ISFTA), have been removed from the negative list of Sri Lanka. Thus, Customs Duty on 10 items in the negative list of Sri Lanka vis-à-vis ISFTA will be zero rated by Budget 2014.

The 10 items are pectic substances, pectinates and pectates (HS Code 1302.00), agar-agar (HS Code 1302.31), mucilages and thickeners - whether modified or not, derived from locust beans, locust bean seeds or guar seeds (HS Code 1302.32), pet food for retail sale (HS Code 2309.10), yarn used to clean teeth - dental floss (HS Code 3306.20), trade advertising material, commercial catalogues and the like (HS Code 4911.10), corrugated sheets (HS Code 6811.81), other sheets, panels and tiles (HS Code 6811.82), hard rubber or plastics - combs, hair-slides and the like (HS Code 9615.11), other - combs, hair-slides and the like (HS Code 9615.19).

According to the Commerce Department, bilateral trade between both countries totalled $ 4.087 billion in 2012 and from January-April 2013, totalled $ 1.17 billion. The balance of trade between India and Sri Lanka always remained in favour of India due to the increased outlay on major imports from India, such as petroleum products, automobiles, cotton and sugar.

Bilateral trade is now envisaged at US$ 10 billion over a three-year period with special focus on turning trade in favour of Sri Lanka.

Since the ISFTA was launched in 2000, the total bilateral trade between the two countries increased by 508 percent to US $ 4.08 billion in 2012, from $ 672 million in 2001. "Importing it at zero duty would help Sri Lankan Industries increase their product quality while also increasing value addition in the long term," the Minister said.