Infrastructure, energy, connectivity, IT, agriculture, manufacturing, pharmaceuticals, tourism, and education could emerge as new areas of collaboration between India and its Southern neighbour Sri Lanka. This was suggested by India’s envoy to Colombo at a high-powered business meet.
High Commissioner of India to Sri Lanka, Gopal Baglay spoke at a virtual event titled “Deepening Economic Collaboration between India and Sri Lanka” on Tuesday. This event was organized by the Federation of Indian Chambers of Commerce and Industry (FICCI) in association with the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKIIRSS).
Secretary, Ministry of Foreign Affairs, Ambassador Ravinatha Aryasinha and the President of FICCI, Dr. Sangita Reddy participated in the event apart from other senior office-bearers from FICCI, LKIIRSS, and representatives from the Sri Lankan Board of Investment, Tourism Promotion Board, and the Institute of Nanotechnology.
Baglay spoke about the dynamic and comprehensive ties between India and Sri Lanka and underlined the need to further expand the wide-ranging bilateral cooperation to effectively and expeditiously address the unprecedented challenges created by the COVID-19 pandemic. He observed that today’s situation calls for policies oriented to the future that balance the need for economic security with the efficient utilization of complementary economic strengths of our two countries.
The High Commissioner outlined a few promising areas for such collaboration such as infrastructure, energy, connectivity, IT, agriculture, manufacturing, pharmaceuticals, tourism, and education. He also mentioned that sustained engagement in these and other mutually beneficial areas will thrive in an encouraging and enabling environment, underpinned by a consistent and predictable policy outlook. He added that building more comprehensive long-term ties between our commercial entities will enhance capacity, promote employment, and increase prosperity.
Aryasinha spoke about the importance of economic recovery in context of the overall challenge posed by COVID-19 and mentioned that both sides could draw upon past successes and the ongoing cooperation to build a way forward. He also highlighted the various opportunities for investment by Indian companies in Sri Lanka.
Industry participants from both sides highlighted opportunities in a number of sectors such as pharmaceuticals, agriculture, manufacturing, connectivity, tourism, and science and technology. It was agreed that sectoral action points will be followed up vigorously.
Sri Lanka has long been a priority destination for direct investment from India. Sri Lanka is one of India’s largest trading partner in SAARC.
Trade between the two countries grew particularly rapidly after the entry into force of the India-Sri Lanka Free Trade Agreement in March 2000. According to Sri Lankan Customs, bilateral trade in 2018 amounted to US $ 4.93 billion. Exports from India to Sri Lanka in 2018 were US$ 4.16billion, while exports from Sri Lanka to India are US$ 767 million.
The main items of exports from Sri Lanka to India are: Base Oil, Poultry feeds, Areca nuts, (waste and scrap) paper or paperboard, Pepper, Ignition Wiring Sets, Copper wire, Marble, travertine and alabaster. Main items of Imports from India to Sri Lanka are: Gas oil/ Diesel, Motorcycles, Pharmaceutical Products, Portland cement, Semi finished products of Iron, Military weapon, Fuel oil, Rice, Cement clinkers, Kerosene Type jet Fuel. India is one of the largest investors in Sri Lanka with cumulative investments of around USD 1.239 billion.
The investments are in diverse areas including petroleum retail, IT, financial services, real estate, telecommunication, hospitality and tourism, banking and food processing (tea & fruit juices), copper and other metal industries), tires, cement, glass manufacturing, and infrastructure development (railway, power, water supply). Last few years have also witnessed an increasing trend of Sri Lankan investments into India. Significant examples include Brandix (about $ 1 billion to set up a garment city in Visakhapatnam), MAS holdings, John Keels, Hayley’s, and Aitken Spence (Hotels), apart from other investments in the freight servicing and logistics sector.
There are healthy linkages between the business chambers of the two countries. Various Indian Chambers have signed MOU’s with Sri Lankan Chambers to promote trade and economic relations, investments between India and Sri-Lanka. Indian Chambers also participate extensively in the various trade fairs organized in Sri Lanka. Sri Lanka is among the major recipients of development assistance from the Government of India. India’s overall commitment stands close to US$ 3 billion, out of which around $ 560 million are purely in grants.
(Economic Times)
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