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Tuesday, 24 June 2014 00:01 - - {{hitsCtrl.values.hits}}
New economic cooperation between Sri Lanka and India is on the horizon, according to the Ministry of Industry and Commerce.
“With the new Indian Government led by Prime Minister Narendra Modi, the focus is on economy and trade. As for the new Government, it is still settling down. But wait and see, there will be a huge focus on economic matters – especially with other trading partners,” India’s outgoing Deputy High Commissioner P. Kumaran has stated during a farewell courtesy call on Industry and Commerce Minister Rishad Bathiudeen.
“We are happy about the new pickup in the levels of Indo-Lanka trade and investments during the last three years and we can do even better,” said Kumaran. “Therefore the outlook for the Indian economy is already becoming more positive. Sri Lanka should take more advantages from India. There is no sign of any changes in India’s trade and investment push towards Sri Lanka by India’s new administration – not yet. The fact that Prime Minister Narendra Modi has a credible record of being a good economic manager changes the entire outlook. There will be lots of improvements of trade and investment with neighbouring countries.”
Kumaran requested priority in relation to two aspects from Sri Lanka – the speeding up of the proposed automobile sector manufacturing and pharmaceutical zones and the two agreements to improve FTA implementation – testing and standards requirements and customs facilitation.
“We have already submitted draft proposals to Sri Lanka and await a response so that the dialogue moves forward. The complaint is from Sri Lankan side really, indicating that Lankan exporters have some difficulties in Chennai, etc. ‘Testing’ is the other aspect; Sri Lankan exporters want this to be standardised. If our draft proposals on these two aspects are taken and we conclude these agreements speedily, then we can immediately move towards the special economic partnership, including the increase of trade and reducing the Negative List, etc.”
Kumaran stressed: “I want to thank you [Bathiudeen] for all the support, friendship and more importantly, the kind cooperation we received from you. In fact you have been extremely kind and supportive. We have no doubts that you will continue to support bilateral relations in the years to come too.”
According to the Department of Commerce of Sri Lanka, total bilateral trade between the two countries stood at $ 3,636 m in 2013. Exports from Sri Lanka to India in 2013 stood at $ 543.3 m while total imports from India to Sri Lanka stood at $ 3,092.6 m. The balance of trade between India and Sri Lanka has always remained in favour of India due to the increased outlay on major import items from India, such as petroleum products, automobiles, cotton, sugar, etc. The unfavourable trade balance narrowed in 2013 to $ 2,549.3 m from $ 2,950.8 m in 2012.
“Your tenure here has been rewarding to Sri Lanka and a success. Congratulations and our warm wishes for your next posting,” said Bathiudeen. “We are also keen to see better bilateral trade so that exporters on both sides benefit. In fact, our exports to India are still at $ 550 m levels and show unrealised upward potential that could be fulfilled with closer cooperation. I am also happy to note your contribution towards FDI to Sri Lanka, for which I thank you on behalf of the people of Sri Lanka.”
On 30 January, Kumaran, addressing an awareness session at EDB on FTAs and Preferential Trade Agreements, revealed that in the next two years India is planning to invest more than $ 2 b in Sri Lanka in diverse sectors, including telecommunications, hospitality, transport, banking and finance, hotels, sugar refining (India’s Renuka Industries), juice processing (Darbur Corp’s project), and real estate projects (Tata Housing Ltd), among others.
