India is negotiating a bilateral investment treaty with Sri Lanka while both countries are looking to open up the market for apparel and service exports through the Economic and Technological Cooperation Agreement (ETCA), Indian High Commissioner to Sri Lanka Santosh Jha said.
Speaking at a webinar held on Saturday (30) by the International Chamber of Commerce Sri Lanka (ICCSL), he said that through ETCA both countries are seeking to broaden the scope of the existing Free Trade Agreement (FTA) and that India is also negotiating a separate bilateral investment treaty with Sri Lanka.
“ETCA is only an advancement on the existing FTA arrangement and not a new effort entirely,” he said.
He added that anyone with an open mind can attest that the India-Sri Lanka FTA has met its objective of opening Indian markets to Sri Lanka by solely relying on data.
Jha said that Sri Lankan exports to India have grown under the FTA roughly by 22 times as compared to 10 times growth in Indian exports to Sri Lanka
“According to Sri Lanka Government figures about 65% of Sri Lankan exports benefit from tariff concessions under the FTA as against less than 5% of Indian exports to Sri Lanka benefiting from FTA concessions,” he added.
Therefore, he noted that it is arguable that without an FTA, Sri Lankan exports to India would be considerably lower and that Indian exports would still be very substantial.
He said that the India-Sri Lanka FTA has enabled the export potential of Sri Lanka to be far greater than it would be, given the size of its GDP.
“India has opened its markets to Sri Lanka more than it has done for any of its FTA partners,” he added.
Further, he said that ETCA is unlikely to see any major opening of the market between India and Sri Lanka in the good sector as the existing FTA and South Asian Free Trade Area (SAFTA) have opened up the market of both countries significantly to each other.
However, he said that ETCA will look to open up the market for the apparel sector.
The Indian high commissioner said that ETCA aims to further refine, upgrade and strengthen the existing FTA framework.
He added that there is a need for a new and updated arrangement between the two countries with four main objectives such as removing impediments to genuine trade, eliminating non-tariff barriers through Mutual Recognition Agreements and other means, ensuring greater trade facilitation and expanding the arrangements for trade in goods and include trade in services and promotion of investment.
Source: the morning
