India, Lanka Services Pact soon

Talks for an agreement on enhanced market access for service sectors between India and Sri Lanka are at an advanced stage and are likely to be concluded by the month-end.

Both countries had entered into a Free Trade Agreement (FTA) covering goods that became operational since March 2000. The FTA will be upgraded to a Comprehensive Economic Partnership Agreement (CEPA), covering services and investments.

"We hope to conclude negotiations by the end of this month. If that happens, the deal could be signed by August," a Government official said.

However, the provisions in the proposed agreement may be toned down.

Sources said Sri Lanka wants to adopt a gradual opening of its services sector.

"They want to give access to Mode four services covering movement of professionals, only when Mode three services covering firms opening affiliates abroad are allowed," the official said. This implies that Sri Lanka is not open to giving access to Indian professionals like doctors or architects. However, if an Indian firm opens a branch in Sri Lanka, Indian professionals can join it.

India is hopeful that Sri Lanka will allow more market access to its services sector. "We will try to convince them that the Indian professionals will not be a threat to the country, but complement their Sri Lankan colleagues," officials said.

Business Standard