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| Sunday, 6 April 2003 |
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Indo -Lanka FTA to encompass services The Indo - Lanka Free Trade Agreement (FTA) will be extended to the services sector too in the near future. With this move, the export and import of services too will become duty free in time to come between the two countries. Counsellor (Economic and Commercial) Indian High Commission V. Ashok said that India and Sri Lanka have set up task forces to make this a reality. The task forces include officials from Sri Lanka's Ministry of Policy Development and India's Ministry of Commerce as well as officials and specialists appointed by the relevant ministries. The task forces will identify the criteria of services each country is able to provide as well as details on the duty structure. Once the preliminary work is completed, the high level task forces will meet in a month or two for negotiations. Ashok said that both governments are confident that the FTA on services would be implemented much faster than the one on trade. At present, 4,100 items imported to Sri Lanka from India are duty free while Sri Lanka is scheduled to make every item on its list duty free by 2008. Ashok said: "Since the effective implementation of the FTA in March 2000, bilateral trade has increased significantly, largely due to the FTA". He added that India's exports to Sri Lanka increased by 18 per cent while Sri Lanka's exports to India increased to 55 per cent. As a result of the FTA, bilateral trade between the two countries has come close to one billion US dollars for the first time in the history of Indo - Sri Lanka trade. India's exports to Sri Lanka in 2002 amounted to US$ 831 million while exports from Sri Lanka to India reached US$ 167.7 million. This is compared to US$ 604.2 million of Indian exports and US$ 70.8 million of Sri Lankan exports in 2001. It represents a 48 per cent increase in total bilateral trade in 2002 over that in 2001. Exports of both countries have increased during this period, India by 37.5 per cent and Sri Lanka by 136.9 per cent. Therefore, the FTA has clearly benefited both India and Sri Lanka as envisaged by the leaders of both countries. The perception that there are many implementation problems is incorrect as most teething problems no longer exist, Ashok said. For example, from March 2000 to mid-2002, Sri Lanka effected 4,600 shipments out of which only 50 consignments were subjected to unanticipated delays. Land bridge Preliminary studies regarding the proposed land bridge between the two countries have been completed. Both parties have agreed to initiate a multi-disciplinary feasibility study envisaging private sector expertise and investment under the guidance of the Planning Commission of India and the Policy Development Ministry of Sri Lanka. Memorandum of Understanding (MoU) An MoU has been signed between the Export Inspection Council of India and the Sri Lanka Standards Institution (SLSI). Under the MoU, the SLSI will honour and accept the EIC certification for Indian goods coming to Sri Lanka as a method of quality certification. In the mean time, the SLSI and the Bureau of Indian Standards are talking to get India to accept the SLSI certificate for exports from Sri Lanka. Ferry service The MoU to initiate a ferry service between Colombo and Tuticorin will be signed in the near future. At present three companies in Sri Lanka - Green Lanka, Universal Shipping and Lily Marine - have expressed interest in operating this service. Operating a ferry service is not as easy as operating a cargo boat service as passenger service boats have to comply with several rules and regulations. The Indo - Lanka Free Trade Agreement was signed by President Chandrika Bandaranaike Kumaratunga and Indian Prime Minister Athal Bihari Vajpayee on December 28, 1998 in New Delhi. Letters were exchanged between the two governments to finalise the annexures while the FTA was fully implemented on March 1, 2000. |
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