Indo-Lanka trade:

‘Enormous potential for growth’

by Lalin Fernandopulle

Trade and investments between Sri Lanka and India had grown steadily with a large number of Indian investors keen to set up ventures in Sri Lanka, High Commissioner to India Y.K. Sinha told guests at a ceremony last week to build a skills development centre for the Faculty of Agriculture in Kilinochchi.

The agreement for the Rs. 300 million, state-of-the-art centre was signed between the Indian High Commission and the Blue Ocean Group.

The construction will be funded by the Government of India and it will be built by Link Engineering, a subsidiary of the Blue Ocean Group. The objective of the project is to create infrastructure facilities to provide a conducive learning environment for students, increase student intake and enhance knowledge and skills of lecturers and students in the field of agricultural science.

The centre will comprise an auditorium, lecture halls, sports complex, computer centre and laboratory facilities.There is enormous potential for growth in trade between the two countries which need to be steadfastly explored and the growth trajectory for trade is promising this year.

Many Indian investors are keen to invest in leisure, education and infrastructure development sectors, the High Commissioner said.

He said more Indian companies will avail of the conducive environment in Sri Lanka and contribute to economic development and bilateral cooperation between the two countries.

Trade between India and Sri Lanka increased 10-fold following the Free Trade Agreement signed in 2000. However, the use of the bilateral trade agreement to boost trade has not been satisfactory as around 70 percent of the trade between the two countries is outside the FTA.The High Commissioner underscored the immense potential for investment between the two countries in the IT, energy sector and in technical training.India is a major trading partner of Sri Lanka and it is the number one source of supplies, accounting for around twenty percent of Sri Lanka’s imports and third largest export destination for Sri Lankan products. Trade between the two countries was around US$ 4.6 million last year. The value of bilateral trade increased from US$658 million in 2000 to US$ 3.6 billion in 2013. Indian visitors make the largest single group accounting for over 25 percent of total arrivals and it is among the top five foreign investors in Sri Lanka. Trade experts said Sri Lanka should make full use of the FTA with India before signing the comprehensive economic partnership agreement which according to certain sections would be detrimental to Sri Lanka with the flooding of Indian professionals to the country.The signing the CEPA has been put on hold with both countries seeking further negotiations.