Sri Lanka urges India to remove non-tariff barriers
Sri Lanka’s Minister of Export Development and International Trade Prof. G. L. Peiris, recently made a strong request to India to remove stringent non-tariff barriers in order to increase bilateral trade between the two neighbouring countries.
He made this request at the inauguration of a seminar on the Free Trade Agreement (FTA) between India and Sri Lanka organized by the Kerala Chamber of Commerce and Industry at Hotel Taj Residency, at Kochi in Kerala, India.
Peiris, according to a press release issued by his ministry, was quoted as saying that that such barriers were hurting trade between the two countries ‘by shaking the businessmen’s confidence and acting as a wet blanket’. However he admitted that restrictions could not be removed overnight and has to be a gradual process.
Peiris said that Sri Lanka seeks investment as well from India as it has become an ideal investment destination in South Asia. Indian investments are welcome in information technology, tourism, spices, leather and ceramics sectors. Investing in Sri Lanka would mean better access to the huge European Union market, which does not charge duty on over 200 export items from Sri Lanka, the release said.
Referring to bilateral trade Peiris said that though considerable progress has been made since the signing of the FTA some roadblocks still remain. He cited the lack of symmetry and reciprocal attitude of India, its tough stand on non-tariff barriers and the lack of air-connectivity between the two countries.
When the FTA was signed, Peiris said that there was considerable apprehension on both sides. The Indian business community was worried mainly about the import of tea from Sri Lanka and their peers in Sri Lanka were scared of the enormous size and capability of India though they were both proved wrong. As a result bilateral trade which stood at US $ 670 million prior to the FTA shot up to US $ 2 billion in 2006. Indian investment too went up from US $ 4 million to US $ 150 million during the same period. Though bilateral trade balance still stood in favour of India, the gap had narrowed down to 4:1 from 20:1, the release said. He said that with a view to enhance the existing economic linkages between the two neighbours through liberalization of trade in merchandise, services, investment and to further widen the scope of cooperation, the two countries are in the process of moving towards a Comprehensive Economic Partnership Agreement(CEPA) which is the logical extension of the FTA. He hoped that the agreement would be signed in the near future.