India and Sri Lanka are now working on a comprehensive economic agreement following the success of the Free Trade Agreement of 1999. This was stated by Sri Lanka's Minister for Export Promotion and International Trade,
Two-day Conference on “India- Sri Lanka: Trade and Investments”
ORF Chennai (December 17 & 18)
India and Sri Lanka are now working on a comprehensive economic agreement following the success of the Free Trade Agreement of 1999. This was stated by Sri Lanka’s Minister for Export Promotion and International Trade, Prof. G.L. Peiris while inaugurating a two-day conference on “India-Sri Lanka: Trade and Investments” in ORF Chennai on December 17 and 18 (2007).
Prof. Peiris said that negotiations were now at an advanced-level on the Comprehensive Economic Partnership Agreement (CEPA) between the two countries. The conference was organised by Observer Research Foundation in association with the Confederation of Indian Industries and the Deputy High Commission of Sri Lanka.
Prof Peiris pointed out that the India- Sri Lanka trade relations were centuries old and went beyond geographical and political demarcations. Now India accounts for a major chunk of Sri Lanka’s imports, over 18 per cent. Its exports to India are also growing. It stands at 7 per cent right now.
The rapid growth in the bilateral trade and investment was possible mainly because of the FTA. While the inherent impediments that flowed from the application of the FTA on the ground are being sorted out mutually, India continues to be a major investor in the island. Sri Lankan investors have also begun making substantial investments in India.
Prof. Peiris said Sri Lanka was the only country in the region to have an FTA in form of the Generalised System of Preference Plus (GSP-Plus) scheme with the European Union, covering as many as 7,200 items. This could be an incentive for Indian investors to take advantage of while investing in Sri Lanka, he said.
Prof. Peiris said Indian industries can set up shop in the IT and ITES, pharmaceuticals and infrastructure in Sri Lanka. At the same time, the Sri Lankan industries can exploit the Indian food processing and packaging industries, he added. The Sri Lankan Minister said all these can be achieved by improving the business-to-business (B2B) contacts, which the two-day conference facilitated.
Mr. P K Mohapatra, Chairman, CII-(Southern Region), in his keynote address, suggested that India and Sri Lanka could explore joint promotion of tourism on the lines of the existing arrangement between Sri Lanka and the Maldives. Joint collaborations could help make the two island-nations as also southern India a regional tourist destination for international travellers.
The Deputy High Commissioner of Sri Lanka for South India, Mr. P. M. Amza, said that the CEPA, once it comes into force, could help the Indian private sector boost their exports to the European Union and other countries in the region, by using Sri Lanka as the base.
Mr. Baljit Kapoor, Honorary Secretary of ORF, in his welcome address, outlined the relevance of the two-day conference. “Vibrant mechanisms do exist at the governmental-levels. Inter-active institutional support and facilitation are also available at the level of individual corporates and traders, across the Bay. Rarely, however, have all of stake-holders sat together to sort out issues of mutual interest and concern, so as to benefit from the increasing pace of bilateral relations,” he said, pointing out that the conference provided the forum in this regard.
Trade as a Tool of Development
The business sessions on December 18 covered the major sectors of “Investments and Industrial Cooperation” and “Trade and Related Matters”. Senior Government officials and representatives of trade and industry organisations from the two countries discussed the pros and cons of investments and trade involving India and Sri Lanka.
The Joint Secretary, Ministry of Commerce, Government of India, Mr Rajeev Kher, reiterated the perspective that trade was a tool for development and should be used and seen as such. Mr C Ignatius, Director, Board of Investment, the apex body facilitating investments in Sri Lanka, explained how increased interactions can lead to strengthening bilateral trade and investments further.
The conference saw individual case studies being projected, success stories narrated and the lessons learnt delineated. The most notable of them were that of Brandix, an apparel manufacturer in Sri Lanka, which has begun work on a 1000-acre textile park at Vishakapatnam, with other global collaborators. The idea was to leverage on the availability of cotton yarn and skilled labour in India to make the Brandix products competitive in the international market, particularly following the high market-share at lower prices that China now commanded in the international market.
Mr. Hasitha Premaratne, representing Brandix, said the company was getting all the help and cooperation from the Indian agencies. Their experience has encouraged other Sri Lankan investors to consider the Indian option in matters of investment-decisions of the kind, he said.
Mr. Sanjay Tiwari of Ceylon Glass Company (CGC), whose parent company belonged to the Piramal Group in India, talked about their success story. Tracing their long trajectory of acquisition, operation and turn-around, Tiwari pointed out that barring him, all other employees were of Sri Lankan origin. Mr. T Pattabhiraman of Ashok Leyland, ORF Chennai, outlined their pioneering efforts in floating the joint sector company, Lanka Ashok Leyland, and explained what made them click.
Mr. M Saikumar, the Zonal Joint Director-General of Foreign Trade, Government of India and Manel de Silva, the Director-General of Commerce, Government of Sri Lanka, spoke at length on the need for greater trust and accommodation with respect to the implementation of FTA. They stressed the need, and outlined the procedure, for minimising red-tape in clearing procedures on either side. They said tremendous scope existed for investments and cooperation in the SME sectors and this could in turn help improve trade ties between the two countries.
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