There is no change in Sri Lanka’s international or domestic trade positioning due to the arrival of a new Government, Industry and Commerce Minister Rishad Bathiudeen said yesterday.
“We pledge that there is no change in the liberal market policies of Sri Lanka by the new Government of President Maithripala Sirisena, rather our determined market economy outlook is strengthened even further by the President’s new policies,” Bathiudeen stressed.
Minister Bathiudeen was addressing Deputy High Commissioner of India to Sri Lanka, Arindam Bagchi, who was making a courtesy call on the Minister yesterday at the Industry and Commerce Ministry. Joining Minister Bathiudeen was Department of Commerce Director General R.D.S. Kumararatne.
“Indo-Lanka relations have been historic and diverse and with the new changes in Sri Lanka, relations can move towards new and stronger levels. The new Government led by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe is on a genuine path to economic engagement and we praise this determined outlook,” said Deputy High Commissioner Bagchi, adding: “A high level visit from India to Sri Lanka is now pending. In recent times we have jointly held 13 rounds of trade talks to smoothen bilateral trade and the results are now evident as total bilateral trade has increased considerably. It is now time to expand from our current goods trade to investment and service exchanges as well. We are very keen to expand trade in these new ways. The great bilateral trade dispute resolution mechanism we now have is one of the leading advantages of the Indo-Lanka FTA.”
According to the Department of Commerce of Sri Lanka, in 2013, total trade between the two countries stood at $ 3.63 billion. Exports from Sri Lanka to India stood at $ 543.3 million while total imports from India were worth $ 3.09 billion. More than 60% of Sri Lanka’s exports to India were under the Indo-Sri Lanka Free Trade Agreement (ISFTA). Since the ISFTA was launched in 2000, Lankan exports to India surged almost eightfold by 2013.
Responding to the Deputy High Commissioner, Minister Bathiudeen said: “In the era of the new Government of President Maithripala Sirisena, and with the support of our Foreign Minister Mangala Samaraweera, Sri Lanka is looking forward to a much stronger trade and bilateral engagement with our historic neighbour India in multiple spheres.
“The Indo-Sri Lanka Free Trade Agreement (ISFTA) now works very well, so much so that India has now become the number one product supplier to Sri Lanka. Once the remaining issues of some of our current exporters to India are resolved, we can move towards a broader economic engagement as you request. As my Director General of Commerce R.D.S. Kumararatne informs me, tariff liberalisation alone will not create market access for Sri Lanka in international markets. It needs to be supported by the removal of Non-Tariff Barriers (NTBs) too.”
Deputy High Commissioner Bagchi stressed: “In order to strengthen this engagement further and move forward, we would like to see a commerce secretarial-level delegation come here and meet you in the not too distant future. As for NTB issues raised by Sri Lanka from time to time, I am happy to inform you that the Government of India has now started a new process of custom tariff and local procedures harmonisation at state-to-state levels so that Lankan exports increase to India across various states and are sustained so that balance of trade can be improved for Sri Lanka.”
The balance of trade 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 balance of trade narrowed to $ 2.54 billion in 2013 from $ 2.95 billion in 2012.
In response, Minister Bathiudeen said: “We are positive that the Indian trade system will, jointly working with Lankan officials, assist in lifting such NTBs and expanding current trade volumes. Both President Maithripala Sirisena and Foreign Minister Mangala Samaraweera are keen to move forward bilateral trade and mutual relations with India. We also welcome an official secretarial-level delegation in the near future and I have instructed the Director General of Commerce and Ministry Secretary S.S Miyanawala to take these meetings forward.”
The second meeting of commerce secretariat-level talks between India and Sri Lanka was held in January 2014 in New Delhi, India.