Business

FDIs to be attracted through SOP

  • Industries Min. launches SOPs

  • Discussions underway with Toyota, AMW to implement SOPs

By Alma Rizvi

 

The Government expects to attract much-required foreign direct investments (FDIs) into manufacturing and assembling vehicles through Standard Operating Procedures (SOP) that were launched by the Ministry of Industries on Monday (15).

Speaking to The Morning Business, Ministry of Industries Industry Development Officer Nishantha Thalawatha said that Sri Lanka spends colossal sums of its foreign exchange reserves in order to import vehicles into the country. However, with the introduction of SOPs, the country would be able to save that amount.

“When vehicles are imported, duties are applicable for them. But if somebody adopts SOPs, it permits them to yield a 70% duty concession while also providing a 20% value addition,” he stated.

In an attempt to minimise the economic impact from importing vehicles into the country, SOPs were launched for manufacturing and assembling vehicles by any local or foreign investor.

Thalawatha further pointed out that Sri Lanka imports most of its national motorcycle requirement from neighbouring country India, but with SOPs in place, the importation is expected to be reduced by 45%. “Discussions are currently underway with AMW and Toyota to carry out policies under SOPs,” he added.

He further noted that investors who are keen on investing in Sri Lanka will have to register with the Ministry of Industries or the Board of Investment (BOI) to obtain this facility.

The initiative will also provide direct employment opportunities to about 20,000 professionals, including technical graduates and engineers in the industrial sector. The SOPs were prepared by the Policy Development Division of the Ministry of Industries in collaboration with the Ministry of Finance, Sri Lanka Customs, Registrar of Motor Vehicles, Sri Lanka Automotive Component Manufacturers Association (SLACMA).

The Ministry of Industries looks forward to bringing in several international manufactures as well as local players towards the assembly of vehicles and automotive component manufacturing, thereby saving around Rs. 300 billion annually.

The SOPs include guidelines and standards for registration at the Department of Motor Traffic, BOI, Sri Lanka Customs, and the Ministry of Industries as well as for the local assembly of vehicles.

It has also specified the necessary regulations for standardisation of the assembling and manufacturing process, the automobiles and components, and the establishment of the assessment facilities. It also has guidelines for the exportation of assembled and manufactured vehicles and the recommended exemptions of excise duties.

The SOPs for the automotive and auto part manufacturing industry of Sri Lanka is now available on the Ministry of Industries website. Prime Minister Mahinda Rajapaksa, in a message of felicitation, stated that by monitoring and regulating the local automobile industry bearing the “Made in Sri Lanka” brand would be able to enter the international vehicle market in accordance with the SOPs, and there would be huge export marketing opportunities worth Rs. 900 to Rs. 1,300 billion annually.