The Indo-Lanka Free Trade Agreement (FTA) was a hot topic at the FICCI-IIFA Global Business Forum on Friday where Indian High Commissioner to Sri Lanka Ashok Kantha said several Sri Lankan companies have made successful forays into the Indian market. Those include Damro, Dankotuwa, MAS Holdings and Colombo Dockyards while Indian companies such as Tata, Indian Oil Company (IO), Airtel and Ceat have also made significant investments in Sri Lanka with plans to expand.
|India’s wealthy Ambani skips IIFA business forum
Mukesh Ambani, chairman and managing director of India’s giant Reliance Industries and the world’s fourth richest man, skipped the International Indian Film Academy Awards (IIFA) weekend in Colombo, official sources said on Friday.He was not present at the opening of the IIFA business forum on Friday where President Mahinda Rajapaksa was the chief guest. The sources said though he had accepted an invitation to attend, Sri Lankan Tourism authorities didn’t receive confirmation of his visit. He was due in Colombo on Friday on a 24-hour visit which was to include a meeting with President Mahinda Rajapaksa to discuss investment options.
Mr. Kantha said the two countries must develop more intensive partnerships. Sri Lanka’s tourism industry has great potential for growth through bilateral cooperation, given the fact that India is the largest market for tourism. He added that the focus for this year should be in diversifying trade and goods and creating a new vision for Sri Lanka – India relations which strengthens existing mechanisms and to formulate a new framework for economic development.
Addressing the Forum, Sri Lankan President Mahinda Rajapaksa said there are abundant opportunities for investment in Sri Lanka such as infrastructure, agri-business, manufacturing and a range of services. “You will also find that our country offers a rare package of skills, capacity, and a willingness to learn and adapt,” he said. The President added that Sri Lanka’s links with India extend far into history and that the scope in Sri Lanka is immense for infrastructure, manufacturing and services.
President Rajapaksa said that although Sri Lanka’s military victories have been publicized, not much coverage has been given to the country’s economic successes.
The President said that between 2005 to 2008, GDP growth has been over 6%, inflation has been lowered to below 4% in 2009 from 22% in 2008 while the unemployment level has dropped to 5.7%. There is widespread construction of ports, airports, water schemes and infrastructure development. Foreign reserves are at a comfortable level. The President added that undue pressure has been exerted on Sri Lanka by elements that supported the LTTE. However, he stressed that there must be development in order to bring permanent peace.
“There is no peace without development and no development without peace,” he said, adding that the rehabilitation and the resettlement of the internally displaced persons (IDPs) in Sri Lanka are far superior than anywhere else in the world.
Indian Member of Parliament Shashi Tharoor, who recently quit as a minister in a scandal over India’s mega cricket tournament-IPL, addressing the gathering said trade has grown rapidly between the two countries after the signing of the FTA. Sri Lanka is India’s largest trade partner in the SAARC region while India is Sri Lanka’s largest trade partner globally.
Following 10 years of the FTA which came into effect in 2000, Dr. Tharoor said there are academic conclusions that the FTA has had positive trade effects. There has been a marked increase in trade after the implementation of the FTA. Overall, Dr. Tharoor said India – Sri Lanka relations are positive and must be built on. He added that following the end of the war, there must be national reconciliation through political consensus in Sri Lanka.
During a panel discussion, Chairman of MAS Holdings Mahesh Amalean said there is access to the Indian market for Sri Lankan industrialists although opportunities have been limited in the FTA though it served its purpose as an initial trade agreement between the two countries. He said he is looking forward to extensions of the FTA which will remove restrictions and more particularly, expand quotes in the garment sector. MAS launched its lingerie brand ‘amante’ in India under the FTA in 2007 recorded strong growth in the Indian market.