India, Lanka readying for dedicated trade talks in March

Lanka puts up a good show at Hyderabad summit:

Being the first FTA for India and Sri Lanka, the 1998 Indo - Sri Lanka Free Trade Agreement carries substantial sentimental value for Sri Lanka. Together both countries can play a major role in elevating the Indo-Sri Lanka economic relations from the current level to a much higher level. Also, the Sri Lankan private sector is upbeat on the outcome of the Partnership Summit 2012, held in Hyderabad.

"I strongly believe that the ISFTA is the most significant and innovative Indo-Sri Lanka partnership we have realized to-date on the commercial front", said Industry and Commerce Minister Rishad Bathiudeen last week.

Minister Bathiudeen was delivering the inaugural address at the 18th Partnership Summit 2012, which started on January 12 in Hyderabad, India with the participation of high-profile ministers from several countries and a large number of industry leaders. Minister Bathiudeen was leading the Sri Lanka delegation to the Summit. In addition to officials of the Commerce Department, the Lankan delegation included representatives from such Lankan private sector players (involved in imports, exports and investments with India) as top apparel maker Brandix Lanka Ltd (which has garment manufacturing facilities in Andra Pradesh giving employment to 14,000 Indian nationals), International Foodstuffs Co Pvt Ltd, Mushan International (a top Lankan gem exporter to India and elsewhere), and E-W Information Systems (EWIS).

Minister Bathiudeen said that Sri Lanka had entered into a new phase of development since the defeat of nearly three decades of terrorism in 2009. "Thanks to the visionary and dynamic political leadership of President Mahinda Rajapaksa, Sri Lanka today is highly stable and peaceful country. The dawn of peace has given a new lease of life and hope to all communities in Sri Lanka" the minister said. The minister expressed hope that the business community of the two countries, together with the support of policymakers, could play a major role in elevating the Indo-Sri Lanka relations to a much higher level.

Minister Bathiudeen elaborated, "Trade relations between our two nations marked a historical milestone with the signing of the Indo - Sri Lanka Free Trade Agreement or the ISFTA in 1998. Being the first FTA for India and Sri Lanka, the ISFTA also carries substantial sentimental value for us. I strongly believe that the ISFTA is the most significant and innovative Indo-Sri Lanka partnership, we have realized to-date on the commercial front. I am sure it also played the role of a DNA in our subsequent economic integrations with other countries. Following the ISFTA, which became operational in 2000, trade between our countries has increased in an unprecedented manner.

"The value of two-way trade had grown from about 650 million US $ in 2000 to well-over three billion US $ by 2010. I am sure that it will reach four billion very soon. Indian FDI started moving into Sri Lanka in 1982, when Ashok Leyland decided to set up a bus assembling plant in collaboration with the Sri Lanka Government. However, substantial Indian investments began flowing in from only mid-1990s.

"These included investments in construction materials such as steel, cement, paint industries and roofing sheets. The third wave of Indian investment followed the Indo-Lanka FTA and the developments in the air traffic and relaxation of visas for Indian nationals. The cumulative Indian investment in Sri Lanka, which stood around 24 million US $ in 2000, has increased to a staggering 600 million dollars by 2011.

Today, India ranks within the top five foreign investors in Sri Lanka. Several Indian companies such as Indian oil, Bharti Airtel, ICICI Bank, Asian Paints, Ashok Leyland, etc., have immensely benefited by investing in Sri Lanka.

"Meanwhile, companies such as Taj Hotels and CEAT have become household brands among the Sri Lankan people. Indian investors have also been enjoying the benefits of the constitutional guarantee of investments, duty-free market access under the ISFTA, double taxation and investment protection treaties.

The conquest of Indian investors further triggered during recent past, when major firms such as Piramal Glass, Fortis Healthcare, Mphasis, TATA Communication, First Source IT, Dabur Consumer Products, Axis Bank etc., expanded their operations into the island.

"Both Sri Lanka and India have been recording an impressive performance on the tourism front as well. As many as 250,000 Sri Lankans had visited India during the year 2010, while India topped the list of tourist arrivals in Sri Lanka in the same year. India continued to be at the top in 2011 as well recording 138,000 tourist arrivals from January to October 2011. This registers a spectacular growth of 45% in comparison to the same period in 2010.

"Sri Lankans increasingly tend to see India as one of the most sought-after destinations for medical treatments and shopping. Indian cities and Colombo have become an ever expanding air routes in facilitating swift movements towards each direction. Every week, there are over 100 flights between Colombo and Indian cities."

"Thanks to the visionary and dynamic political leadership of President Mahinda Rajapaksa and our brave armed forces, Sri Lanka today is a highly stable and peaceful country. The dawn of peace has given a new lease of life and hope to all communities in Sri Lanka. Sri Lanka has now reached a high growth phase, both economically and socially" Minister Bathiudeen said.

The Sri Lankan private sector representatives in the business delegation were upbeat on the outcome of their visit to Andra Pradesh (AP). Andra Pradesh Chief Minister N Kirankumar Reddy said that Andra Pradesh will gladly continue to support Sri Lankan firms entering his State. "You have our fullest support" he said. Sources from the Summit revealed that MAS Holdings, another Sri Lankan apparel giant is also now looking to set up a manufacturing facility in AP to resources on the labour and other manufacturing resources that AP offers, to the Sri Lankan apparel industry.

Singapore, Emeritus Senior Minister, Goh Chok Tong, UAE, Foreign Trade Minister, Lubna Al Qusimi, Indonesia, Trade Minister, Gita Wirjawan, Afghanistan, Finance Minister, Omar Zakhiwal, India, Commerce, Industry and Textiles Minister Anand Sharma and Andra Pradesh Chief Minister Kiran Kumar Reddy also addressed the inaugural session.

Bilateral sessions

Thereafter, in the afternoon of January 12, Minister Bathiudeen also took part in two bilateral sessions representing Sri Lanka, with India and UAE.

At the opening of the bilateral sessions with India, both Minister Bathiudeen and Indian Commerce and Industry Minister Anand Sharma stressed on the long standing historic trade relations between the neighbours. Minister Bathiudeen thereafter brought to the notice of Indian Minister Sharma of the some concerns expressed by certain Sri Lankan business leaders' on the Indo-Sri Lanka Free Trade Agreement related issues. Minister Sharma, responding to Minister Bathiudeen, requested that Sri Lanka can now submit all these concerns in writing to himself after which necessary steps will be taken. Thanking for the keenness shown by Minister Sharma, Minister Bathiudeen thereafter extended Sri Lanka's invitation to India to the forthcoming mega Sri Lanka Expo 2012 to be held in March in Colombo, after a lapse of 15 years.

Accepting Minister Bathiudeen's invitation, Minister Sharma indicated that he himself may likely to lead the high level Indian business and official delegation to Sri Lanka Expo 2012. Both Ministers also agreed to hold a fresh round of bilateral trade talks with Minister Sharma's participation in Colombo coinciding with Expo 2012 event. Both countries also agreed to dedicate the forthcoming session to pending matters pertaining to both the Indo-Lanka FTA and the Indo-Lanka CEPA. Minister Bathiudeen stressed that he is eagerly looking forward to Minister Sharma's visit to Sri Lanka, bringing down the curtain on the January12 Indo-Lanka bilateral trade sessions in Hyderabad.

Thereafter, Minister Bathiudeen also held another bilateral trade session with UAE Foreign Trade Minister Lubna bint Khalid Al Qasim who was taking part in Hyderabad's Partnership Summit 2012.

Both Ministers reviewed the progress of Sri Lanka and UAE bilateral discussions on November 23, 2011 in Colombo amidst renewed trade ties between both countries (The November 23 talks were also led by Minister Bathiudeen for Sri Lanka and United Arab Emirates Foreign Trade Minister Lubna bint Khalid bin Sultan Al Qasim.

Minister Bathiudeen also renewed his invitation to UAE for high level UAE delegations to the Expo 2012 mega show, which was re-confirmed by Minister Lubna. UAE is the largest investor in Sri Lanka from the Gulf economies, having invested nearly $ 100 million and also UAE has been ranked as the third largest investor in Sri Lanka in 2010.