Indian and Sri Lankan authorities are now working towards the finalisation expeditiously of the much delayed and widely debated Economic and Technology Co-operation Agreement (ETCA), which will replace the existing free trade agreement (FTA) entered into in March 2000, Trade Ministry sources confirmed, adding that discussions have resumed after more than five years. The conclusion [...]

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India, Sri Lanka resume efforts to finalise ETCA

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Indian and Sri Lankan authorities are now working towards the finalisation expeditiously of the much delayed and widely debated Economic and Technology Co-operation Agreement (ETCA), which will replace the existing free trade agreement (FTA) entered into in March 2000, Trade Ministry sources confirmed, adding that discussions have resumed after more than five years.

The conclusion of ETCA negotiations has been delayed for more than five years since 2016, as it was opposed by professional bodies, particularly in the IT and healthcare sectors who alleged that it would give preference to Indian workers displacing skilled Sri Lankans.

It was initially scheduled to be signed in 2016 when President Ranil Wickremesinghe was the prime minister at that, time; a senior Trade Ministry official said adding that it is expected to address larger issues of market access and asymmetry in two-way trade.

According to the Commerce Department, there has been no progress in negotiations between India and Sri Lanka with regard to the controversial ETCA since the last round of bilateral talks in October 2018.

Preliminary discussions on the ETCA were held in 2015 during the Fourth Commerce Secretary-level talks between the Indian and Sri Lankan sides in New Delhi where this agreement was proposed.

The 12th round of negotiations which were scheduled to be held in September 2019 was postponed pending cabinet approval.

This was due to a new regulation introduced by the then Ministry of Development Strategies and International which had made Cabinet approval compulsory to conduct negotiations for any trade agreement, he explained.

The importation of goods from India to Sri Lanka was at a very low level under the FTA during the past few years due to heavy taxes on Indian imports which was not covered under the FTA.

Further Indian imports were subjected to other levies and duties in addition to customs duties such as the cess levy and the Ports and Airports Development Levy (PAL), the official pointed out.

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