India, Sri Lanka Sign Pact To Boost Economic Ties

India and Sri Lanka yesterday signed a landmark investment promotion and protection agreement to boost bilateral economic ties and decided to bury their political differences.

The agreement for the promotion and protection of investment was signed by external affairs minister I K Gujral and his Sri Lankan counterpart Lakshman Kadirgamar, at the end of Gujrals four-day visit to the island. This is a new beginning, Gujral told a joint news conference with Kadirgamar later.

Kadirgamar described the agreement as a confidence-building measure and said it would help in greater flow of investments between the two countries.

Gujral said he had already informed the Indo-Sri Lanka joint commission meeting of New Delhis decision to unilaterally reduce tariff and remove all non-tariff barriers on 70 to 80 products exported by Sri Lanka. He said commerce ministries officials of the two countries would hold talks in the next ten days in New Delhi to finalise the list of the products.

 

Kadirgamar described the meeting with his Indian counterpart as a historic and almost dramatic enhancement of relationship between the two countries. He was confident this trend in relations would gain momentum and not slide backwards and would be marked by openness and a continued dialogue.

He said trade imbalance between the two countries was a staggering 1: 15, with Indian exports to the island touching $500 million and Sri Lankas export to India only $21 million last year. It is a question of concern to both countries. Something must be done about it, he added.

Kadirgamar said though New Delhi had agreed to reduce tariff and quantitative restrictions on about 80 export items from Sri Lanka out of a list of 192 items, he had been assured by Gujral that the list would be expanded gradually.

Gujral reiterated that New Delhi would not interfere in the internal affairs of Sri Lanka.

He responded with a firm no to a question on whether India would offer military assistance to Colombo to deal with the Liberation Tigers of Tamil Eelam (LTTE) in view of the fact that the rebels posed a security threat to India, too. India would take care of whatever security threat it perceived, he added.