Addressing the Ceylon Chamber led business forum in Sri Lanka’s capital Colombo on Friday Indian Premier Narendra Modi stressed that he is prepared to address these concerns.
“I want balanced growth in trade. We will try to make it easier and smoother for you to access the Indian market,”
“That is part of my philosophy of ease of doing business in India. Our agreement on customs cooperation is a step in that direction.” Modi said.
India and Sri Lanka signed the historic free trade agreement in 1998 and further discussions were held between the two countries in 2000 in New Delhi.
The agreement provides duty free market access to both the countries on a preferential basis in a phased manner.
India has also agreed to permit limited quantities of imports of tea and garments from Sri Lanka.
“We are pleased to be Sri Lanka's largest trading partner and one of its largest sources of investment. It has given a big boost to our trade,”
“Sri Lanka's exports to India have grown sixteen times – yes, sixteen times – since then. This is impressive by any standards.” Modi said.
Indian Premier added that both countries should move boldly to conclude a comprehensive economic partnership agreement (CEPA) in order to ensure that Sri Lanka does not fall behind the competitive world.
“You should also attract investments from India for exports to India. That should be the natural outcome of our proximity and your strengths,”
“And, I know that there are many large commitments in the pipeline. They are looking for your support,” Modi stressed.
Delivering opening remarks, Ceylon chamber of commerce chairman Suresh Shah called both governments to set up a high powered dispute resolution mechanism to resolve existing issues.
Recognition of standards, non-tariff barriers and testing procedures widely regarded as concerns yet to be addressed when doing business with India.
According to Shah; political will, regulatory framework and anxiety have kept deeper economic ties between the two countries as a concept rather than as a policy.
“The political will on the Lankan side is far more positive now,”
“We also have no doubt that under your leadership; the Indian regulatory environment will soon meet the needs of modern day trade.”
India is 60 times larger than Sri Lanka in terms of population and 24 times larger in terms of its economy.
“Under such circumstances, Sri Lankan businesses cannot hope to drive the economies of scale that their Indian counterparts are born to,”
“An asymmetric mechanism that recognizes Sri Lanka’s inherent scale disadvantages will go long way to ease the concerns.” Shah emphasized.