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Indo-Lanka Relations

India is Sri Lanka’s largest trading partner globally, while Sri Lanka is India’s second largest trading partner in the SAARC. It is the number one source of supplies accounting for twenty percent of Sri Lanka’s total imports and third largest export destination for Sri Lankan products absorbing six percent of total exports. Among tourists, Indian visitors make the largest single group having a share of twenty seven percent of total arrivals. In the investment field, India is among the top five foreign investors in Sri Lanka. Trade between Sri Lanka and India has grown rapidly after the entry into force of the Indo-Sri Lanka Free Trade Agreement in March 2000. The value of bilateral trade increased fromUS$658 million in 2000 to US$ 3.6 billion in 2013.

Sri Lanka’s exports growth has largely been under the ISFTA, whereas India’s exports have remained mostly outside the ISFTA. In average, over 70% of Sri Lanka’s exports to India continue to be under the ISFTA, while India’s exports to Sri Lanka under the ISFTA remains only around 25%. Sri Lanka could export more than 4000 product lines to the Indian market on duty free basis. The noteworthy aspect of the growth of exports under the agreement is the broader product diversification, which took place following the FTA.

Major exports from Sri Lanka under the ISFTA includes; apparel, furniture, MDF boards, glass bottles, processed meat products, poultry feed, insulated wires & cables, bottle coolers, pneumatic tires,  tiles & ceramics products, rubber gloves, electrical panel boards & enclosures, machinery parts, food preparations and spices etc.

 Table – 1: Trade between India and Sri Lanka : 2000 – 2013  (Values in US $ Millions)

Year

Exports

Imports

Total Trade

Balance of Trade

2000

55.65

600.12

655.77

-544.47

2001

70.12

601.50

671.62

-531.38

2002

168.86

834.70

1,003.56

-665.84

2003

241.14

1,076.17

1,317.31

-835.03

2004

385.50

1,358.01

1,743.51

-972.51

2005

559.26

1,440.41

1,999.67

-881.15

2006

494.06

1,822.07

2,316.13

-1,328.01

2007

516.40

2,785.04

3,301.44

-2,268.64

2008

418.08

3,006.93

3,425.01

-2,588.85

2009

324.87

1,709.93

2,034.8

-1,385.06

2010

466.60

2,546.23

3,012.83

-2,079.63

2011

521.65

4,338.04

4,859.69

-3,816.39

2012

566.37

3,517.23

4,083.60

-3,517.23

2013

543.37

3,092.67

3,636.04

-2,549.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Sri Lanka Customs

Table -2: Major Exports to India in 2013                                                      

Product

Value in US$ Mn

Spices

89.11

Natural Rubber & Rubber products

22.07

Poultry Feed

38.38

Insulated wires, cables etc

33.87

Copper & Copper based products

7.54

Refrigerators, freezers and other refrigerating equipment  & Machinery

6.65

Paper & Paper products

24.42

Ships, Boats and floating structures

51.83

Fiber board of wood

9.91

Furniture, bedding, mattress etc

15.92

Apparel

34.26

Source: Sri Lanka Customs

Table – 3: Major imports from India in 2013

Product

Value in US$ Mn

Motor Vehicles

383.03

Mineral fuels & oils

403.02

Cotton

191.96

Pharmaceutical products

164.54

Knitted and crocheted fabric

93.87

Plastic articles

84.36

Iron & Steel

209.29

Chemicals

55.83

Cement

181.40

Sugar

77.74

Source: Sri Lanka Customs

India and Sri Lanka also share the membership in other regional and multilateral trading arrangements namely; Asia Pacific Trade Agreement (APTA), South Asia Free Trade Agreement (SAFTA) in the SAARC context, BIMSTEC (Bay of Bengal Initiative for Multicultural Technical and Economic Cooperation), Global System of Trade Preferences (GSTP) and the World Trade Origination (WTO) which were influential in strengthening and further advancing trade and economic ties. To our mutual benefit India is one of the leading investors in Sri Lanka with the presence of major Indian companies including:

• CEAT Limited
• Gujarat Glass Limited
• Indian Oil Corporation Limited
• Neelkamal Plastics Limited
• Gujarat Ambuja Limited
• Bharti Airtel Limited
• National Thermal Power Corporation
• Indian Hotels Co. Limited
• State Bank of India
• Indian Bank
• ICICI bank
• Indian Overseas Bank
• Larsen & Toubro Limited
• Carin India Limited
• Mphasis

With the entry into force of the Indo- Sri Lanka Free Trade Agreement, the foreign direct investment flow has taken place both-ways. The Sri Lankan investors in India include;

• Aitken Spence Hotel Managements
• Bank of Ceylon
• Brandix India Apparel City
• Damro Furniture (Pvt) Ltd
• DSI Tyre India (Pvt) Ltd
• Hatton National bank
• hSenid Software (India) Pvt. Ltd
• John Keells Logistics India Pvt Ltd
• Multilac
• Ritzbury India Pvt Ltd
• Regency International Clothing P Ltd
• Sri Lankan Airlines Ltd
• Serene Holidays Pvt Ltd (John Keells Group Company)

 

 

 

 

 

 

 

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