Sri Lanka mulls joining RPNs for market-driven exports

To cash in on the international mineral sands and rare metals boom, Sri Lanka has imposed cesses on its granite and sandstone.

Sri Lanka is also bringing in cesses on fruits and vegetable imports to curb substandard imports and to support domestic producers. More importantly, to position for market-driven exports-based manufacturing, Sri Lanka is also mulling integrating with Regional Production Network (RPN).

“The Government has taken action to revise the import and export cesses imposed on certain items through the enforcement of the following orders published in Gazette No. 1764/5 of 27 June 2012 and Gazette No. 1762/29 of 13 June 2012 under the Sri Lanka Export Development Act No. 40 of 1979. Sir, it has become necessary and our responsibility to protect the local industry and farmers as well as to contain the import of substandard products to the local market. Accordingly, through Order No. 1764/5, cesses have been revised on import of frozen vegetable, dried vegetables, fresh mandarin, wheat flour, malt extract, ferrous waste and scarp while cesses have been newly imposed on iron bars and rods, alloy steel, iron tubes and pipes. Order No. 1762/29 brings in cesses on granite and sandstone exports on cubic metres,” said Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka addressing the Parliament on 9 October.

Accordingly, cess on granite HS Codes 2516.11 – Rs. 24,000 ($ 186.6) per cubic metre, HS 2516.12 – merely cut into blocks – Rs. 12,000 ($93.3) per cubic metre), stand-stone (HS Code 2516.20 – Rs. 12,000 ($93.3) per cubic metre) and other types of building stones (HS Code 2516.90 – Rs. 12,000 ($93.3) per cubic metre) has been imposed.

As per fruits and vegetable imports, cess on frozen vegetables, onions and garlic HS Codes 710.80 and 710.80.10 – Rs. 600 ($4.6), dried/sliced/cut/powdered but not further prepared vegetables (HS Code range 712.20, 712.90.10, 712.90.90, at Rs. 600 ($4.6), citrus fruit fresh/dried HS Codes 0805.20, 0805.20.10 – Rs. 30 ($0.23 cts), wheat (HS Code 1101.00.10 – Rs. 20 ($ 0.15 cts) and malt extract based preparations (HS Code 1901.90.10 – 15% rate) have been imposed.

Apprising the House of the Government’s intentions to integrate with Regional Production Networks (RPN) to sustain long-term exports based manufacturing thereby pushing the country’s exports to be market driven, Minister Bathiudeen revealed: “The Asian countries have shown substantial economic growth. India and China which are major markets in the region are expected to grow by over 6% in 2012 and 2013. Therefore, the potential in these markets are very high and accordingly, we are concentrating on diversifying our markets to the Asian region. Already our exports to these markets have increased and we plan to further increase our export volume to these markets in the near future. This also shows the promise of joining Regional Production Networks that are the emerging trend in global exports. “The upcoming two specialised manufacturing zones on automotive components and pharmaceuticals with the valuable support of the Government of India is, I believe, a major step in this direction facilitated by my Ministry. We are also enlisting India’s support to revive our textile sector and I am pleased to inform this august chamber that we have received Indian consent to increase our five million garment quota to eight million giving strong support to our apparel export sector. What is more important is that we are now gradually progressing towards becoming a regional export manufacturing hub.”