Indo-Lanka FTA: India to facilitate more imports from Lanka

India is committed to remove bottlenecks in the Indo-Lanka Free Trade Agreement (FTA), High Commissioner of India Y.K. Sinha, told a presentation on bilateral trade between the two countries organised by the National Chamber of Commerce of Sri Lanka (NCCSL) in Colombo.

Sinha said that India will take steps to facilitate greater imports from Sri Lanka under the FTA. India allows eight million pieces into the Indian market from Sri Lanka, without any restrictions on fabric sourcing.

“We have also extended the validity period of the licences for processed meat from six months to one year.

Quarantine restrictions on Rambuttan and Mangosteen have been dispensed with. Some of the initiatives were on bilateral discussions during the visit to Sri Lanka by India Commerce Secretary in June,” he said. “I believe that Sri Lanka must take steps to expand its manufacturing base.

India is willing to support Sri Lanka in this regard. Top Indian companies have displayed great interest in Sri Lanka, investing in the country across sectors such as infrastructure, manufacturing, services, and construction,”said Sinha.

“We are involved in oil exploration, railway development, coal power generation, skills development and other areas,” he said. He welcomed the removal of 10 items from the negative list, including corrugated sheets, pet food and tiles by the Sri Lankan government in the 2014 Budget.India has also proposed measures in tackling Non Tariff Barriers and to resolve trade disputes, Sinha said.

He said that there has been an increase in Indian investments in Sri Lanka in recent years. The cumulative FDI approvals for Indian investments stand at about US$ 1 billion since 2003, with investment inflows of US $160 million in 2012. Nearly US$ 2 billion worth of FDI has been committed by Indian companies over the next five years.

“We also expect trade between Sri Lanka and India to reach $ 10 billion in three years time. India is hoping to disburse US$ 250 million as loans, with no interest or other payments, to Sri Lanka over the next 2-3 years as against the US$ 100 million in loans disbursed in 2012,” he said. The value of imports from India to Sri Lanka reached $ 3484 million in 2012 compared to US $4,328 million in 2011. The value of Sri Lankan exports to India reached US $519 million in 2012 compared to US$ 529 in 2011. Total trade between Sri Lanka and India was US$ 4,003 million in 2011 and US$ 3,799 million in 2012, Sinha said.

The bilateral trade agreement signed in 1998 and implemented from 2000 has significantly contributed to increase trade between the two countries. Since the FTA was signed, two-way trade turnover grew eight times and reached a high of nearly $ 5 billion in 2012.

- GW