Sri Lanka seeks new trade deal with India after a decade

19 Jun '10

2 min read

Sri Lankan government is intending to extend its economic ties with India, by signing a new trade deal, once concerns are addressed. This new initiative has come after 10 years of the first free trade agreement, which was signed with the neighbour, averred a government minister.

To carry forward the existing India Sri Lanka Free Trade Agreement signed 10 years ago, both countries are now negotiating a Comprehensive Economic Partnership Agreement (CEPA).

Currently, the government is making a note of the agitations put forth by few sections of the business communities, especially the entry to Indian markets, which was restricted by taxes in sub-national states.

More so, Indians are now enjoying bigger economic freedoms than they experienced ten years ago.

According to Information Minister and spokesman for Sri Lanka's cabinet, Keheliya Rambukwella, both nations have progressed since the first agreement and the new deal is aimed at addressing some problems that were encountered with the old one.

CEPA will have a dispute resolution mechanism, wherein exporters will be able to deal with their problems. In addition, CEPA will also form a forum for trade secretaries of both nations, so that they can interact every six months and trade ministers can meet annually to resolve their problems.

A leading Sri Lankan garment exporter, MAS, has already requested signing of the new agreement. With this new trade and service liberalisation, taxes will be lessened on the free exchange of products between the two countries, prices will be down and access to lower income class will rise.

Fibre2Fashion News Desk - India