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Indo-Lanka FTA to be renegotiated end March

by Ravi Ladduwahetty

The Indo Lanka Free Trade Agreement will be renegotiated end March, Minister of Commerce and Consumer Affairs Ravi Karunanayake told the Daily News yesterday.

The changes intended are aimed at ensuring that that Sri Lanka's exports to the sub continent will be expanded on a scale which the trade balance currently in India's favour, Minister Karunanayake said.

Minister Karunanayake will lead an eight member Sri Lanka delegation for bilateral talks with the Indian Government. It will comprise Ministry Secretary Harsha Wickremasinghe, officials of the Ministries of Enterprise Development, Investment Promotion, Industrial Policy and Constitutional Affairs and Commerce and Consumer Affairs, the Board of Investment, the Sri Lanka Tea Board and the Ministry of Foreign Affairs.

Among the core issues that Sri Lanka will press with the Indian Commerce Minister Murasoli Maran and other Commerce Ministry officials will be reductions of tariff barriers from the current 50 percent to 90 per cent which will enable Sri Lanka exports to find free access to the Indian subcontinent, Deputy Director of Commerce M.G. Dharmapriya told the Daily News yesterday.

During the March negotiations with the Indian Government, Sri Lanka will also ask for more ports of call in the Indian subcontinent for its tea and garment exports which have been given priority under the Agreement, he said.

He explained that Sri Lanka's exports to the Indian subcontinent had access though any Indian ports but Sri Lanka's tea and garments had access only thorough Mumbai, Cochin, Chennai and Calcutta.

The Indo- Lanka Free Trade Agreement originally came into effect in 1998 and permitted the export of 15 million kilos of tea and 8 million pieces of garments per annum from Sri Lanka, but only 4000 pieces of garments and around 4 million kilos of tea have hitherto been exported to India, he said.

There were some additional criteria which need negotiation. These revolve round the Rules of Origin (ROO) on value addition of garments which need to be renegotiated from the Indian side which will settle the imbalance and harmonisation of Customs Codes for around 6000 items aimed at removing the duplications in imports/exports, he said.

From the Indian side, they have very little to ask for as most of the major Sri Lankan imports from the subcontinent such as cotton, machinery are on the exempted list, he added.

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