As year-on-year bilateral levels surged by 6.3%, overall trade volumes between India and Sri Lanka too has edged towards a historic mark-just $83 million shy of coveted $5Bn threshold.
“We are on the verge of important turning points in our bilateral trade history” said Minister of Industry and Commerce Rishad Bathiudeen on 11 August in Colombo.
Minister Bathiudeen was addressing the 5th edition of the Indo Ceylon Economic Dialogue (ICE dialogue-5) jointly organized by the Federation of Chambers of Commerce and industry of Sri Lanka and Federation of Indian Chamber of Commerce and Industry at Renuka Hotel in Colombo on 11 August. Joining Minister Bathiudeen at the session were Deputy Indian High Commissioner to Sri Lanka Arindam Bagchi, delegates from the Federation of Indian Chamber of Commerce and Industry and President of Federation of Chambers of Commerce and Industry of Sri Lanka Sarath Kahapalarachchi.
“B2B initiatives, such as today’s Indo Ceylon Economic Dialogue which has successfully moved on to its fifth session are the types of platforms that both governments can formulate to strategise the forthcoming expansions in our historic bilateral cooperation. Today’s session takes place at a time when we are on the verge of important turning points in our bilateral trade history. In that both countries are looking at expanding the existing trade mechanism for a much wider engagement as called by the highest levels of administration. The other turning point is that latest trade data from the Department of Commerce shows that last year our total bilateral trade has arrived at $ 4.91 billion. You too would agree that this value is just short of only 83 million dollars for us to cross the historic five billion dollar bilateral trade milestone” said Minister Bathiudeen and added: “In that both countries are now ready to cross the $5 Bn mark in bilateral trade at any time. Interestingly, this promising trade growth was seen on a year on year basis even last year-in that last year alone our bilateral trade grew by 6.3 percent to arrive at this $ 4.9 billion. We also notice significant demand from India for certain Sri Lankan products during the last five years. This growth was driven by such Lankan products as nuts and seeds, pepper, boats and ships, as well as our leading export brand, apparels. In the last five years, our nuts and seed exports to India increased by almost 35 times, pepper increased by three times to $ 85 million. Our Ship and boat exports increased by nearly three times to $57 million and our apparel exports to India doubled to $ 30 million by 2015. I also believe that reducing product similarities in our trade basket and further diversification of the products and services can significantly enhance trade volumes. Just as our trade shows a growth trend our bilateral investments too are showing a positive trend. On the investment side, from 2005 to 2015 September, total Indian investment volume in Sri Lanka has come close to $ 800 million. We have been given to understand that more Indian private sector FDIs of one billion dollars are in the pipeline for Sri Lanka. Interestingly, we also notice FDI movements have become bilateral and some Sri Lankan FDIs have moved to India as well. Among the countries that supplied equity to India in the last 16 years Sri Lanka ranks as the 53rd country. As of March this year, Sri Lanka’s investments in India totals US $ 40 million. In fact Sri Lanka’s investments in India stands above investments by such countries as Portugal, Kuwait, Jordan, and some African countries.”
Among Sri Lankan firms invested in India and are doing well are MAS, Orange Electricals, and Damro.
Indian Deputy High Commissioner Bagchi, addressing the event said that in the aftermath of recent political changes in both countries, there is renewed optimism in investment and trade on both sides. “A high level Indian delegation is headed to Colombo in October and we are looking to re-formulate Indo Lanka CEO Forum when they are in Colombo. As for our bilateral relations, after the FTA was signed, Indo-Lanka relations heavily focused on economic relations. Indian exports to Sri Lanka increased by 10 times while two-thirds of Sri Lankan exports make use of FTA benefits.”
The Indo-Sri Lanka Free Trade Agreement (ISFTA) was signed in December 1998 and came into force on 2000.
Minister of Industry and Commerce Rishad Bathiudeen addresses the 5th edition of the Indo Ceylon Economic Dialogue (ICE dialogue-5) jointly organized by the Federation of Chambers of Commerce and industry of Sri Lanka and Federation of Indian Chamber of Commerce and Industry at Renuka Hotel in Colombo on 11 August joined by Deputy Indian High Commissioner to Sri Lanka Arindam Bagchi (seated far left).