Colombo for completing trade talks with New Delhi, Beijing mid-2017

India is the largest source of imports with a share of 23 per cent ($ 4,268 million in 2015) of Sri Lanka’s total imports.

Sri Lanka plans to complete its negotiations on trade pacts with India, China and Pakistan by the middle of next year.

During his visit to New Delhi early this week, Sri Lanka’s Minister of Development Strategies and International Trade Malik Samarawickrama met Minister of State (Independent Charge) for Commerce and Industry Nirmala Sitharaman and the two Ministers urged their officials to expedite negotiations on the proposed Economic and Technology Cooperation Agreement (ETCA) expeditiously. A delegation from India would go to Colombo this month-end.

India largest source of imports

India, being the largest source of imports with a share of 23 per cent ($ 4,268 million in 2015) of Sri Lanka’s total imports, has been having negotiations with Sri Lanka on the ETCA, an extension and improvement over the existing Free Trade Agreement (FTA). Last year, exports to India accounted for a little over six per cent of Sri Lanka’s overall exports with $ 643 million. Of them, 63 per cent was under the FTA.

The first round of bilateral talks on the ETCA began in December last. Originally, the idea was to sign a framework pact for the ETCA but this was given up. Even as certain sections in Sri Lanka continue to nurse reservations, the government in recent months organised a campaign to counter the anti-ETCA drive

20 p.c. imports from China

Though Colombo depends upon Beijing for 20 per cent of its imports, there is no bilateral FTA. While there has been some progress on the lists of “highly sensitive products,” “generally sensitive products” and “normal products,” the two will have to finalise rules of origin and product list. China’s Foreign Minister Wang Yi, who begins his three-day-long visit to Sri Lanka on Friday, is expected to discuss issues concerning the FTA, apart from many other topics including industrial capacity, trade and investment.

Pakistan vital trading partner

In the SAARC (South Asian Association for Regional Cooperation) region, Pakistan is considered an important trading partner of Sri Lanka, both of which signed the FTA in July 2002. Tea, copra and rubber are being exported to Pakistan while Colombo is importing cement, textiles, pharmaceuticals from Islamabad. Under FTA, Sri Lanka exported goods worth $ 59 million to Pakistan last year, which was about 81 per cent of the total exports to the SAARC member-country.