Indo-Lanka trade hits $3 b mark

There is no change in Sri Lanka's international or domestic trade position due to the change of government, rather, it stands strengthened even more, Industry and Commerce Minister Rishad Bathiudeen told Deputy High Commissioner of India to Sri Lanka, Arindam Bagchi when he paid a courtesy call on Minister Bathiudeen at the Ministry last week.

"Indo-Sri Lanka relations have been historic and diverse and with the political changes in Sri Lanka, relations could move towards newer and stronger levels. The new government is on genuine path of economic engagement and we praise this determined outlook," said Deputy High Commissioner Bagchi.

"A high level visit from India to Sri Lanka is now pending but yet to be confirmed. In recent times we have held 13 rounds of trade talks to smoothen bilateral trade and the results are now evident as total bilateral trade has increased considerably," he said.

"It is time to expand from goods trade to investment and service exchanges. The bilateral trade dispute resolution mechanism we have is one of the leading advantages of the Indo-Lanka FTA," Bagchi said.

According to Commerce Department sources, in 2013, trade between the two countries stood at $3.63 billion. Exports from Sri Lanka to India stood at $543.3 million while imports from India was at $3.09 billion.

More than 60% of Sri Lanka's exports to India were under the Indo-Sri Lanka Free Trade Agreement (ISFTA). Since ISFTA was launched in 2000, Lanka's exports to India surged almost eightfold by 2013.

Minister Bathiudeen said, "Sri Lanka looks forward to a much stronger trade and bilateral engagement with our historic neighbour India in multiple spheres. There is no change in Sri Lanka's liberal market policies under the new government. Today, the Indo-Sri Lanka Free Trade Agreement works well. So-much-so that India has become the number one supplier to Sri Lanka."

"Once the remaining issues of some of our exports to India are resolved, we can move towards a broader economic engagement. As Director General, Commerce, R.D.S. Kumararatne told me, tariff liberalisation alone will not create market access for Sri Lanka in international markets. It needs to be supported by the removal of Non-Tariff Barriers (NTBs) too," he said.

Deputy High Commissioner Bagchi said, "To strengthen this engagement further and move forward, we would like to see a Commerce Secretarial level delegation meet you in the not too distant future."

"As for NTB issues raised by Sri Lanka from time to time, the Government of India has started a new process of Custom tariff and local procedure harmonisation, at State-to-State level to increase Lanka's exports to India and the balance of trade could improve for Sri Lanka," he said.

The balance of trade always remained in favour of India due to the increased outlay on major import items from India, such as petroleum products, automobiles, cotton and sugar. The unfavourable balance of trade narrowed to $2.54 billion in 2013 from $2.95 billion in 2012.

Minister Bathiudeen said, "We are positive that Indian and Lankan trade officials will work together to remove NTBs and expand trade. We also welcome an official Secretary level delegation in the near future."