‘Four thousand product lines unutilized under FTA’

The Indo-Lanka Free Trade Agreement (FTA) is being hotly debated currently due to the proposed CEPA agreement that is to be signed.

The United Nations Office for Project Services (UNOPS) National Portfolio Development Head Rohantha Atukorala said that almost 4,000 product lines that have concessions under the Indo Lanka FTA have not been utilized by Sri Lankan exporters and this needs to be addressed by the business community and National

Export Chambers, at the Rotary Club of Colombo West luncheon meeting at Cinnamon Grand.

Athukorala being a former Chairman of the Sri Lanka Export Development Board and serving many Government Ministries currently, accepted that there are many non trade barriers that needs to be addressed but also emphasized that Sri Lankan exporters must become very aggressive to compete in the Indian market as the market is essentially protection oriented.

Any country goes through this phase but it’s only through dialogue with policy makers and being entrenchedly competitive that we can make exports to India reach one billion dollars, which is possible given that we are poised to touch a 500 million dollars of business once again with India this year,” he said.

Currently ten products consist the basket of exports from Sri Lanka that account for ninety percent of exports earnings from India and the strategic sectors of apparel and tea negligible in nature.

What’s interesting is that the non FTA exports from Sri Lanka are at a low ebb of 50 million dollars which is the same as the year 2000 when the FTA with India came to force while the non FTA products exports from India to Sri Lanka which was only 500 million dollars in the year 2000 is today a sizable two billion dollars. This would mean that without the FTA Sri Lankan exports to India would have remained stagnant while Indian exports which are largely on the non FTA route would have grown four times from the year 2000 level, he said.

“Hence in essence 90 percent of the exports to India have taken place with the help of the FTA mechanism while only 30 percent of the exports from India have come under the FTA.

This explains the future potential the Sri Lankan exporters have in the Indian market if the other 4000 product lines are pursued, provided that we become aggressive and policy makers ensure that the non tariff barrier issues are addressed,” said Athukorala.

Currently there are 429 items in the negative list of India and 1108 items in the Sri Lankan negative list.

But there is debate on the structure if the FTA that was apparently signed within a short time period when normally India takes almost two years to sign a typical FTA with over twenty or more consultations.

It is been broadly mentioned that the CEPA agreement addresses this issue but most Sri Lankan exporters have voiced their expression that the anomalies of the current agreement needs to be addressed before a new one is signed while many have voiced that the contents of the proposed CEPA agreement are not known.