Sri Lanka secures US $ 550 million direct investment from India

by Shirajiv Sirimane

Sri Lanka was able to secure over US 550 million dollars worth of foreign direct investment benefitting vital sectors of the economy during the recent Indian visit of President Mahinda Rajapakse.

Among these ventures will be the US $ 450 million worth coal power plant to be set up in Trincomalee, the investor being the National Thermal Power Corporation.

In addition, South Asia Petrochemicals will pump in US $ 75 million to set up a manufacturing plant for export of petroleum by-products. According to Enterprise Development and Investment Promotion Minister Rohitha Bogollagama, who was a member of the Presidential delegation, land in Trincomalee has already been earmarked for the project and the agreements would be signed next month. "We are awaiting approval from the Central Environment Authority and construction will commence in March," he said.

In addition US$ 15 million will be invested by the Advance Group of Companies to manufacture super phosphate for local agriculture using rock phosphate as a raw material while Rajshree Sugar and Chemicals Ltd will invest US$ 16 million in a sugar refining project.

The Taj Group plans to invest US$ 8 million for the refurbishment of their hotels.

Minister Bogollagama said that in 2004, 87 Indian companies have invested US$ 144 million in Sri Lanka.

The Minister also got the Ceylon Chamber of Commerce to sign a MOU with the Confederation of India Industry (CII).

"This will open new avenues of investments between the two countries," he said. The CII is the premier business association in India incorporating under its umbrella the topmost 5,000 companies covering various sectors and services. It also has 48 branches all over India.

Sri Lanka's exports to India in 2004 amounted to US$ 382 million while India's exports to Sri Lanka was US $ 1350 million.

Although the trade balance is in favour of Sri Lanka the ratio between Sri Lanka's imports from India and Sri Lanka's exports to India is 3:51 compared to almost 10:1 in 2000.