India and Sri Lanka hold economic dialogue as bilateral trade nears $ 5 b mark

Indo-Sri Lanka trade has grown by 6.3% this year bringing it closer to the $ 5-billion mark, Industry and Commerce Minister Rishad Bathiudeen said yesterday. 

Minister Bathiudeen was addressing the 5th edition of the Indo-Ceylon Economic Dialogue (ICE dialogue-5) jointly organised by the Federation of Chambers of Commerce and Industry of Sri Lanka and the Federation of the Indian Chamber of Commerce.

“A high level Indian delegation is headed to Colombo in October and we are looking to re-formulate the Indo-Lanka CEO Forum when they are in Colombo. As for our bilateral relations, after the FTA was signed, Indo-Lanka relations heavily focused on economic relations. Indian exports to Sri Lanka increased by 10 times while two-thirds of Sri Lankan exports make use of FTA benefits.” 

He said both countries were looking at expanding the existing trade mechanism for a much wider engagement as called for by the highest levels of administration. The latest trade data from the Department of Commerce shows that last year total bilateral trade was $ 4.91 billion, just short of $ 83 million to cross the historic $ 5 billion trade milestone. Indo-Sri Lanka trade grew by 6.3% in 2015 as well. 

“We have noticed significant demand from India for certain Sri Lankan products during the last five years. This growth was driven by such Lankan products as nuts and seeds, pepper, boats and ships, as well as our leading export brand - apparel. In the last five years, our nuts and seed exports to India increased by almost 35 times, pepper increased by three times to $ 85 million. Our ship and boat exports increased by nearly three times to $ 57 million and our apparel exports to India doubled to $ 30 million by 2015.” 

Bathiudeen believes reducing product similarities in the trade basket and further diversification of products and services can significantly enhance trade volumes. On the investment side, from 2005 to 2015 September, total Indian investment volume in Sri Lanka has come close to $ 800 million. 

“We have been given to understand that more Indian private sector FDIs of one billion dollars are in the pipeline for Sri Lanka. Interestingly, we also notice FDI movements have become bilateral and some Sri Lankan FDIs have moved to India as well. Among the countries that supplied equity to India in the last 16 years Sri Lanka ranks as the 53rd country. As of March this year, Sri Lanka’s investment in India totals $ 40 million. In fact, Sri Lanka’s investment in India stands above investments by countries such as Portugal, Kuwait, Jordan and some African nations.”