Interviews
India-Lanka trade quadruples to $2.7 bn in Post-FTA
12 May '08
3 min read
In terms of composition of bilateral trade, some important changes occurred in the post-FTA period, pointed-out FICCI study.
In 1999-00, cotton, automotive, vegetables, pharmaceuticals and machinery and appliances were the top 5 items of Indian exports constituting around 50% of our total exports to Sri Lanka.
However, in 2006-07 mineral fuel and iron & steel replaced vegetables and machinery, in the top 5 items of exports to Sri Lanka.
Around 30% of our exports to Sri Lanka constituted mineral fuels in post-FTA period. Exports of mineral fuels registered an unprecedented increase from almost nil in 1999-00 to $702 million in 2006-07 to Sri Lanka.
Similarly, iron & steel increased by more than 4 times in the post-FTA period. Imports also witnessed a change in composition in post-FTA period.
Vegetable/animal fats & oils became the largest importing items of imports from Sri Lanka replacing tea and coffee in the post-FTA period, highlighted FICCI study.
FICCI study further said that not only trade but even investment flows also increased significantly as a result of FTA.
FTA provided an opportunity for Indian investors to export from Sri Lanka to India at zero duty and also to import raw materials in Sri Lanka at zero duty.
From April 1996 to March 2002, India's total FDI in Sri Lanka was only $62 million. It ratcheted up to $450 million as a result of FTA by 2004, observed FICCI study.
In 1999-00, cotton, automotive, vegetables, pharmaceuticals and machinery and appliances were the top 5 items of Indian exports constituting around 50% of our total exports to Sri Lanka.
However, in 2006-07 mineral fuel and iron & steel replaced vegetables and machinery, in the top 5 items of exports to Sri Lanka.
Around 30% of our exports to Sri Lanka constituted mineral fuels in post-FTA period. Exports of mineral fuels registered an unprecedented increase from almost nil in 1999-00 to $702 million in 2006-07 to Sri Lanka.
Similarly, iron & steel increased by more than 4 times in the post-FTA period. Imports also witnessed a change in composition in post-FTA period.
Vegetable/animal fats & oils became the largest importing items of imports from Sri Lanka replacing tea and coffee in the post-FTA period, highlighted FICCI study.
FICCI study further said that not only trade but even investment flows also increased significantly as a result of FTA.
FTA provided an opportunity for Indian investors to export from Sri Lanka to India at zero duty and also to import raw materials in Sri Lanka at zero duty.
From April 1996 to March 2002, India's total FDI in Sri Lanka was only $62 million. It ratcheted up to $450 million as a result of FTA by 2004, observed FICCI study.
Federation of Indian Chambers of Commerce and Industry
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