India, Sri Lanka To Discuss Trade Imbalance

Meet to discuss the Sri Lankan list of 84 items on which bilateral tariff concessions have been sought

India and Sri Lanka are expected to soon begin addressing the issue of trade balance that Colombo complains is unfavourable to it.

Officials of the commerce ministries of the two countries are likely to meet later this month to discuss the Sri Lankan list of 84 items on which bilateral tariff concessions have been sought by Colombo.

The list was first presented in April this year but because there was a caretaker government in place then, New Delhi requested a deferment of the discussion. What also held up the discussion was that India had already announced its export-import (Exim) policy and could not incorporate new concessions.

 

Figures compiled by leading chambers of commerce here show that India exports goods worth $550 million to Sri Lanka. In turn Sri Lanka manages to export goods worth only $50 million to India.

Trade experts concede that this is a serious imbalance, though they simultaneously point out that it is unrealistic to think in terms of a perfect balance.

We know that there can never be equal bilateral trade between India and Sri Lanka but the ratio of over 5:1 is not a fair reflection of Sri Lankas export potential, a senior diplomat in the Sri Lankan High Commission here said. He said during Prime Minister I K Gujrals visit to Colombo in January this year, when he was external affairs minister in the Deve Gowda government, he had offered concessions on 70 to 80 items.

But we had pointed out that there were non-tariff barriers in India that were stifling our exports, the diplomat said. He said India permitted a lot of imports from Sri Lanka only under special import licence. This creates a non-tariff barrier. We believe India should allow open general licence, he said.

The diplomat said that India was not addressing the issue of the consumer goods sector with Sri Lanka.

The items on which Sri Lanka is seeking concessions include ceramic ware, rubber products, shoes, coconut-based items, toiletries, spices and confectioneries.

He particularly emphasised high quality ceramic ware that Sri Lanka specialises in. Brands such as Noritake known for their fine porcelain ware can gave a potentially big market in India.

The diplomat said it was in Indias interest to strengthen Sri Lankas export since that would help increase its peoples purchasing power.

Despite being a country of just 17 million, we provide India a market worth half a billion dollars. A little help from India in terms of allowing more Sri Lankan goods could make that market even more worthwhile, he said.

Among the new ideas that Sri Lanka is exploring is projecting itself as an attractive destination for Indias flourishing movie industry.

Indian mainstream filmmakers, forever looking for exclusive locales, have not yet discovered Sri Lankas natural beauty.

If Hollywood filmmakers can come all the way, why cant those from Mumbai and Chennai do so too? the diplomat asked. Another area that Sri Lanka is trying to promote is its tourism sector. It offers great holiday possibilities. It is just three hours away from Delhi by an Air Lanka flight, two hours from Mumbai and barely one hour from Chennai, the diplomat said.