Financial Times

Local paint makers protest possible free trade move
Local paint manufacturers are lobbying to the government not to succumb to pressure by their Indian counterparts to remove paint from the Free Trade Agreement (FTA) ‘negative list’ and have written to the authorities pending the round of discussions between the parties this week.

“Paint manufacturers in India are trying to get paints removed from the Sri Lankan negative list in the FTA,” Gerald de Saram, President Paint Manufacturers Association (PMA) told The Sunday Times FT.

He said this move will help Indian firms to export paint to Sri Lanka duty free. “This duty was at 35 percent some time ago and was reduced to 25 percent. But if duties are removed altogether the economies of scale of the Indian manufacturers will destroy the locals. This is because we have a very small market,” he explained.

He said India also produces raw material for paint, which gives the Indian manufacturers a greater advantage, whereas local firms have to import the raw material.

“We have to pay hard currency to import them and there is an exchange rate disadvantage as well. Also labour rates and the cost of production in India are very low.

“Considering all these factors, the local manufacturers are at a severe disadvantage, because they do not have a level playing field,” he said.
De Saram said this issue also threatens the direct and indirect employees in the industry. “There are 15, 000 employees who are threatened by such a move,” he said. He said the PMA is trying to meet Rohitha Bogollagama, Minister of Enterprise Development to explain the issue.

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