The almost 25-year-old India-Sri Lanka FTA is in need of an upgrade that would make it comparatively similar to India’s more recent other strategic FTAs, Indian high commissioner to Sri Lanka Santosh Jha said recently (2), speaking at the Wion’s Global Innovation and Leadership Summit held in Colombo.
“For more than a decade, Sri Lanka has enjoyed a trade surplus with India. If you just calculate only FTA enabled trade, the trajectory of Sri Lankan exports to India is also growing steadily. India is now the second largest export market for Sri Lanka,” Jha said.
“And yet, by common acknowledgement from both sides, there is much more to be done. Most of all, an upgrade to our FTA into a modern framework that delivers the full potential of our bilateral economic partnership.”
In the last six years, India has signed 9 FTAs covering trade with 38 countries, with the India-EU, India-UK, India-New Zealand, India-Oman and India-UAE being among the most notable FTAs signed.
“We have spent too long talking about it and sometimes renaming it, but not actually moving in purpose and required political will to forge a framework,” Jha said.
“I say this not to assign blame, but to note that every year of delay is a year of lost opportunity.”
Jha further added that in the existing framework, Sri Lanka has benefitted from it in the past decade. “It was widely acknowledged that the FTA has delivered on its promise of benefiting Sri Lanka more than India. More than 65% of Sri Lankan exports use FTA benefits, whereas only 5% of Indian exports use FTA benefits.”
In India’s FTA with Oman, among the notable changes introduced is Oman’s offering of enhanced commitments regarding the temporary entry of professionals and significant tariff elimination on Indian exports in labour-intensive sectors.
Jha reiterated India’s interest in energy connectivity with Sri Lanka, and connecting its power grid with that of India’s; long-term energy supply enrichments, such as the prospect of a petroleum pipeline between the nations, and the further development of tank farms.