“We cover 40% of the world”

Buoyed by its latest exports turnaround, Sri Lanka is now marshalling its FTAs to directly catapault into major global regions-and for the first time, FTAs have become an FDI driver. ”You will be eligible for even more free trade when we begin our FTA with yet another G20 economy in addition to India-which is China. As a result, 40% of the world population will be directly accessible to Lankan exporters” said a keen Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka on 30 January in Colombo.

Minister Bathiudeen was addressing an EDB organized awareness session called “Preferential Trade Agreements and FTAs for Lankan Exporters” on 30 January held at the EDB Auditorium in Colombo. Joining the session were P. Kumaran (Deputy High Commissioner of India) and Hasan Ali Zaigham (First Secretary of High Commission of Pakistan in Colombo).

Under SAFTA mechanism, Sri Lanka accesses 1.64 huge South Asian market while Sri Lanka’s bilateral FTAs with India and Pakistan give access to over 1.3 Bn market inside SAARC region (296 Mn, in addition to India and Pakistan). And under APTA, the sole such mechanism linking Chinese and Korean markets to Lanka, another 1.39 Bn market access-resulting in overall direct access to 43% of the overall world market! Meanwhile, 2013 annual exports (provisional) showed a turnaround with a 6.2% surge to $ 10397 Mn.

“Thanks to the FTAs with India and Pakistan, Sri Lankan exporters can now export more than 8500 product lines without tariff, to these two promising markets. In fact, there is substantial trade growth after these FTAs were implemented” said Minister Bathiudeen, and added: “India is Sri Lanka’s largest trade partner in SAARC region. Bilateral trade between both countries totalled $ 4 Bn in 2012. This is a, huge, 508% increase from dollars 672 Million trade in 2001, as a result of the FTA. Both countries are now targeting dollars 10 billion trade over a period of 3 years, with special focus on trade in favour of Sri Lanka. Pakistan is the second largest trading partner of Sri Lanka in the SAARC region after India. A substantial growth in bilateral trade is seen after the FTA between the two countries which was implemented in 2005. Total trade has increased from US $ 158 Mn in 2005 to US $. 433.69 Mn in 2012. However, despite these FTA developments, I believe there are still unrealized trade potentials that we can explore. There are many more product lines under FTAs that Sri Lankan exporters have not touched and it is now time to make use of them to achieve our President HE Mahinda Rajapaksa’s national export goal of $ 20 Billion by 2020. More importantly, I am pleased to say that you, the Lankan exporters, will be eligible for more free trade when we begin our FTA with yet another G20 economy after India, which is China. As a result, with FTAs of India, Pakistan and China, 40 percent of world population is directly accessible to Lankan exporters free of barriers, for the first time in our history!”

RDS Kumararatne (DG-Commerce), addressing the session with an in-depth detail of Indo-Lanka trade, revealed: “We have made significant progress in our recent Indo-Lanka Secretary level discussions in New Delhi last week. As a result, to move trade faster, we have now set up a streamlined, a two tiered mechanism by formulating an on the spot problem solving system for Procedural issues and an official level engagement method on trade Policy issues so that exporters of both sides can better focus on their cargo.”

Anura Siriwardena (Secretary, Ministry of Industry and Commerce), said: “We had a very fruitful meeting with our Indian counterparts in New Delhi last week at the Secretary level trade discussions. There are opportunities and possibilities for trade with India for us. At our level, each and every officer is ready to work in a very cordial manner. Shri Arvind Mehta, Joint Secretary  of Indian Department of Commerce also agreed to address issues on the non-tariff-barriers faced by our exporters so that the FTA is fully utilised. Both sides will work together to address these.”

P. Kumaran, (Deputy High Commissioner of India), addressing the event, outlined various sectors of Indo-Lanka cooperation and said: “What is interesting to see is mutual investment between India and Sri Lanka too has risen as a result if Indo-Lanka FTA and strengthened over  the years. We see opportunitives in, transhipment opportunities, ship building, construction, financial services, education and tourism. In the next two years, we have over $ 2 Bn in the pipeline for investment in diverse areas here-from telecommunication to hospitality to transport, banking and finance, hotels, sugar refining by our Renuka Industries, Darbur Corp’s juice processing project, real estate projects by Tata Housing, Krrish project, 600 Mn power plant in Sampur are some of them.  On the other hand Lankan investments in India too have been expanding–for example Brandix has a project in our Vishakapatnam’s garment city with a huge investment of $ 01 billion. China is also now planning to invest in our Vishakapatnam’s garment city in several manufacturing plants.”