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The countries will now aim to expand bilateral trade to the tune of US$ 10 billion within the next three years from the current US$ 5 billion while the FDI flows from India are likely to grow to US$ 2 billion from the current US$ 560 million.
Attended by a large number of CEOs heading Indian operations in Sri Lanka, the launch was the first formal interaction of Indian corporates with new Indian High Commissioner Yashvardhan Kumar Sinha. Sinha addressing the gathering noted that since the signing the Free Trade Agreement (FTA) between the countries in 2000, growth in trade had gone up eight fold.
Growth in trade
Sri Lankan exports to India which amounted to US$ 45 million in 2001/2002 have expanded to US$ 720 million in 2011/2012, Sinha said. “Indian bilateral trade in 2011/2012 crossed the US$ 5 billion mark. It is an example to other countries in the region on how two neighbours can cooperate through mutual beneficial ways to create a win-win situation.” Such cooperation on a SAARC and regional context would promote development and growth across all countries, he asserted.
There has been a significant increase in Indian investments since 2001, now reaching close upon US$ 1 billion, with FDI flow from India in 2012 alone to the tune of US$ 560 million. “The target is to increase it to over US$ 2 billion within the next two years,” Sinha said.
“This is important as investments result in economic growth and development of the country, particularly if they are in key sectors such as infrastructure development, etc. In Sri Lanka the notable key areas are manufacturing, tourism, agriculture, and pharmaceuticals among others.
Expanding engagement
Expressing appreciation towards Indian companies and entrepreneurs who have contributed significantly to the growth story in Sri Lanka and to enhancing India-Sri Lanka economic and commercial relations – whether in the form of trade, services of good or investments in significant sectors such as infrastructure, services, tourism, manufacturing, pharmaceuticals, etc. – he noted that there was tremendous scope for India and Sri Lanka to further expand economic engagement. “Overseas Indians act as a bridge between India and the countries in which they reside. In Sri Lanka you are doing this job commendably.”
Reflecting on the close relationship enjoyed by the country, Sinha cited the Colombo Port as the best example – 30% of Indian cargo transhipment business is through Colombo, he said. Complementary synergies such as this can be used on a mutually-beneficial account.
“India and Sri Lanka can work together not only in each other’s countries, but perhaps also in third countries,” Sinha suggested. “I am happy to note there are Sri Lankan companies taking advantage of Indian economic growth story and investing in India as well.”
He assured: “We in India are prepared to help Sri Lanka in whichever way we can, in whichever way they desire, particularly in building its export capacity so that the trade imbalance that exist between the two countries can be addressed. I hope the forum will join in promoting and enhancing our bilateral economic engagement.”
Connecting through business
The forum is headed by Sanjay Tiwari who also serves as CEO and Executive Director at Piramal Glass Ceylon. Tiwari noted that the ‘most fruitful and long-lasting’ way to link up countries is through businesses, rather than on a political front.
Prior to setting up a forum to connect, Indian CEOs have worked together on many occasions with the objective of strengthening trade ties between the two parties. Some actions with mentioning are meeting with the policy makers in the Government through Indian High Commission officials to share development and seek their support, sharing experiences within the group, helping new investors settle new ventures, various CSR activities and contributing towards many celebrations.
Outlining the purpose and objectives of establishing a forum, Tiwari listed the following: promote and contribute to the economic growth of Sri Lanka through Indian investment, safeguard and strengthen existing economic cooperation through the nations, foster economic ties between India-Sri Lanka, provide an open forum for discussion for the business leaders who lead Indian multinationals and Sri Lankan companies, and to have a platform for share experience and knowledge.
“Indian professionals and investors have not only been contributing to the growing relation between the two countries but also made a substantial contribution to the economy,” Tiwari said. “We believe Indian CEOs and heads of companies can impact the future investments positively. Hence the setting up of the forum.”
Reaping the benefits
While India readies to take more opportunities from Sri Lanka’s development process, Sri Lanka too can reap benefits from the Indian growth story.
“India is the leading trade partner with bilateral trade crossing over US$ 5 billion with an expectation to enhance it up to US$ 10 billion within the next three years,” he expressed. “Since the enforcements of FTA, India has emerged as a foremost development partner in public investment strategy through the provision of assistance and trade totalling US$ 2 billion. Sri Lanka is India’s largest trading partner in South East Asia while India is Sri Lanka’s largest trading partner globally.”
Indian investment in Sri Lanka has been on the rise. Key sectors the investments have gone into include healthcare, real estate, glass packaging, energy, utility, infrastructure, banking, tourism, food, transport, rubber, garment, among others.
“This is the first-ever set of professionals consisting of top Indian experts across Sri Lanka in all industries who will use their collective power to attract further Indian investments to the country as well as help ease the investment process of potential investors.”
Benefits of the forum
Listing the benefits of the forum, Tiwari assured that it could be showcased by the Government in attracting more investments to the country, while policy makers would have the opportunity to interact with the forum and seek opinion for further improvement in the system to boost investment. “This forum can be used by delegates coming to discuss opportunity of investment or expansion, and the members of the forum can assist the Government to conduct road shows to attract potential.”
The forum will prepare a memorandum of suggestions for government for annual budgets, conduct seminars and workshops to upgrade the knowledge level of the community and above all will be able to showcase successful case studies not only to potential Indian investors but to investors across the globe.
– Pix by Upul Abayasekara
