Lanka-India economic pact beyond trade in goods

The Comprehensive Economic Partnership Agreement is expected to take the Sri Lankan and Indian economies beyond trade in goods towards greater integration and impart renewed impetus and synergy to bilateral economic interaction.

The Indian government will extend every possible assistance to Sri Lanka to expand its economy by exploring new opportunities in sectors like IT and BPO. Sectors for cooperation identified include telecom, professional services, construction and engineering, ICT, energy, tourism etc. This assurance was given by the Indian High Commissioner in Sri Lanka Alok Prasad when he addressed a meeting organised by the Indo- Lanka Chamber of Commerce and Industry to mark its first anniversary last week.

He added that CEPA would also look at trade in services, facilitation measures on bilateral investment and economic cooperation to compliment economic liberalisation and it will improve market access through trade facilitation and removal of non trade barriers. “CEPA will take our bilateral relationship to a qualitatively new dimension, encompassing wide areas of cooperation in energy, infrastructure, transport, health, information technology, education and other areas,” he said.

Outlining Sri Lanka-India economic relations and prospects after CEPA, the Indian High Commissioner noted that Sri Lankan trade with India had been increased by ten fold since 2000 and Sri Lankan exports to India have recorded a 90 percent increase under the FTA while Indian exports to Sri Lanka increased by 45 percent. India is the third largest market for Sri Lanka's exports after the US and UK.

Prasad disclosed that issues relating to the exports of Sri Lankan garments, textiles, vanaspathi and tea had been effectively tackled by the two countries and India has agreed to grant tariff concessions to Sri Lankan apparel exports. Duty free concessions will be granted to three million pieces of readymade garments, he said.

The Indian High Commissioner expressed the belief that several impediments for Sri Lankan exports to Indian states due to its different tariff structures could be settled with the introduction of common tariff system and harmonised custom procedures by the Indian government.