Time to walk the talk

Saturday, 6 July 2013 00:00 - - {{hitsCtrl.values.hits}}

The Pathfinder Foundation welcomes the acceptance of the principle of special and differential treatment by the Indian trade delegation which visited Sri Lanka recently, given the asymmetry between the two economies. This transpired at meetings chaired by Dr. P.B. Jayasundera, Secretary, Ministry of Finance and Planning, Sri Lanka and S.R. Rao, Secretary of Commerce, India. The convening of the first meeting of the Joint Task Force involving private sector representatives from the two countries, which was established last year, was also a positive development.

The Pathfinder Foundation, which has consistently advocated that greater advantage should be gained from Sri Lanka’s very favourable economic geography (i.e. its location in the dynamic Asian region and close proximity to the large and expanding Indian market), welcomes these developments. During the discussions both sides recognised the considerable potential to expand bilateral trade. It is even more encouraging that there was recognition of the need for this to take place in a balanced way that seeks to address the current large trade deficit in the favour of India. The commitment to double bilateral trade to US$ 10 billion in three years, as well as to address non-tariff barriers and review the negative lists in the Indo-Sri Lanka Free Trade Agreement as a means of achieving this are also noteworthy developments. In addition, it is learnt that the Sri Lankan delegates appreciated the unilateral concessions that had been made by India in relation to Sri Lankan exports of apparel, processed meat and a couple of fruit items. There is growing interest among Indian and Sri Lankan companies and State-owned enterprises to invest in each other’s markets. There is also a greater recognition of the role that Indian investment can play in assisting Sri Lanka to enhance its export performance by integrating into Indian and regional supply chains, particularly in the automobile components, light engineering and pharmaceutical sectors. India has become Sri Lanka’s largest tourism market. These meetings led to an agreement to strengthen cooperation and improve connectivity to boost activity in this sector. The private sector tour operators and hoteliers in Sri Lanka need to focus their promotional activities on targeting high net worth tourists from India, providing them high-end facilities and entertainment. The Pathfinder Foundation hopes that these talks between the Sri Lanka and India, headed by very senior policy-makers from both countries, constitute an important step in a process that enables Sri Lanka to increase its growth and productive employment potential by taking greater advantage of the scope that exists for expanding trade, investment and tourism between the two countries. While appreciating these emerging trends, it should be noted that both sides need to ‘walk the talk’ to realise the potential for further expanding trade, investment and tourism involving the two countries.