Being the first FTA for India and Sri Lanka, the 1998 Indo – Sri Lanka Free Trade Agreement carries substantial sentimental value for Sri Lanka. Together both countries can play a major role in elevating the Indo-Sri Lanka economic relations from the current level to much higher level. Also, Sri Lankan private sector is upbeat on the outcome of the outcome of Partnership Summit 2012, held in Hyderabad.
“I strongly believe that the ISFTA is the most significant and innovative Indo-Sri Lanka partnership we have realized to-date on the commercial front”, said Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka on 12 January. Minister Bathiuden was giving the inaugural address at the 18th Partnership Summit 2012, which started on the same say in Hyderabad, India with the participation of high-profile ministers from several countries and a large number of industry leaders, representing 47 countries.
Minister Bathiudeen was leading the Sri Lanka delegation to the Summit. In addition to officials of Minister's Department of Commerce, the Lankan delegation included reps from such Lankan private sector players (involved in imports, exports and investments with India)as top apparel maker Barndix Lanka Ltd (which as garment manufacturing facilities in Andra Pradesh giving employment to 14000 Indian nationals), International Foodstuffs Co Pvt Ltd, Mushan International (a top Lankan gem exporter to India and elsewhere), and E-W Information Systems (EWIS).
Minister Bathiudeen stated that Sri Lanka had entered into a new phase of development since the defeat of nearly three decades of terrorism in 2009. “Thanks to the visionary and dynamic political leadership of President Mahinda Rajapaksa, Sri Lanka today is highly stable and peaceful country. The dawn of peace has given a new lease of life and hope to all communities in Sri Lanka” the minister added. The minister expressed hope that the business community of the two countries, together with the support of policymakers, could play a major role in elevating the Indo-Sri Lanka relations to a much higher level.
January Minister Bathiudeen elaborated: “Trade relations between our two nations marked a historical milestone with the signing of Indo – Sri Lanka Free Trade Agreement or the ISFTA in 1998, being the first FTA for India and Sri Lanka, the ISFTA also carries substantial sentimental value for us. I strongly believe that the ISFTA is the most significant and innovative Indo-Sri Lanka partnership, we have realized to-date on the commercial front. I am sure it also played the role of a DNA in our subsequent economic integrations with other countries.”
“Following the ISFTA, which became operational in year 2000, trade between our countries has increased in an unprecedented manner. The value of two-way trade had grown from about 650 million US dollars in 2000 to well over 3 billion dollars by 2010. I am sure that it will reach 4 billion very soon. Indian FDI started moving into Sri Lanka in 1982, when Ashok Leyland decided to set up a bus assembling plant in collaboration with the Government of Sri Lanka. However, substantial Indian investments began flowing in from only mid-1990s. They included investments in construction materials such as steel, cement, paint industries and roofing sheets.”