There is no change whatsoever in Sri Lanka's international or domestic trade positioning due to the arrival of new government, rather, it stands strengthened even more Minister of Industry and Commerce Rishad Bathiudeen assured.
"We pledge that there is no change in Sri Lanka's liberal market policies by the new government of HE the President Maithripala Sirisena-rather, our determined market economy outlook is strengthened even further by the President's new policies," he said.
The Sri Minister gave this assurance to the Deputy High Commissioner of India to Sri Lanka Arindam Bagchi when the latter made a courtesy call on Minister Bathiudeen Tuesday at the Ministry.
Minister Bathiudeen noted that with the new changes in Sri Lanka the historic and diverse Indo-Sri Lanka relations can move towards new and stronger levels.
He said the new government, led by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, is in a real, genuine path for economic engagement.
Noting that a high level visit from India to Sri Lanka is now pending but still to be confirmed, the Minister recalled that the two countries have jointly held 13 rounds of trade talks in recent times to smoothen bilateral trade.
"The results are now clearly evident as total bilateral trade has increased considerably," he noted.
He said it is now time to expand from the current goods trade to investment and service exchanges as well.
"We are very keen to expand trade in these new ways. The great bilateral trade dispute resolution mechanism we now have is one of the leading advantages of Indo-Lanka FTA," he pointed out.
According to the Department of Commerce of Sri Lanka, in 2013, total trade between two countries stood at US$ 3.63 billion. Exports from Sri Lanka to India stood at $ 543.3 million while total imports from India were at US$ 3.09 billion. More than 60% of Sri Lanka's exports to India were under Indo-Sri Lanka Free Trade Agreement (ISFTA) signed in 2000. Since then, Sri Lankan exports to India surged by almost eightfold by 2013.
The ISFTA has been very successful to the point that India has now become the number one product supplier to Sri Lanka, the Minister said.
Minister Bathiudeen responding to Indian diplomat said under the new government Sri Lanka is looking forward to a much stronger trade and bilateral engagement with India in multiple spheres.
"Once the remaining issues of some of our current exporters to India are resolved, we can move towards a broader economic engagement as you request," the Sri Lankan Minister told the Indian envoy.
He said the tariff liberalization alone will not create market access for Sri Lanka in international markets and it needs to be supported by the removal of Non-Tariff Barriers (NTBs) too.
Addressing the issue of non-tariff barriers to trade raised by Sri Lanka, the Indian envoy said the Government of India has now started a new process of custom tariff and local procedures harmonization, at state-to-state levels so that Lankan exports increase to India across various states are sustained and therefore, the balance of trade could be improved for Sri Lanka.
The balance of trade always remained in favour of India due to the increased outlay on major import items from India, such as petroleum products, automobiles, cotton, sugar etc. The unfavorable balance of trade narrowed to US$ 2.54 billio in 2013, from US$ 2.95 billion a year before.
In response, Minister Bathiudeen expressed confidence that Indian trade system will, jointly working with Lankan officials, assist to lift such NTBs and expand current trade volumes.
He said both the President Sirisena, and Foreign Minister Mangala Samaraweera are keen to move forward bilateral trade and mutual relations with India.
Bagachi said that in order to strengthen the engagement with Sri Lanka further and move forward, India would send a Commerce Secretarial level delegation to visit Sri Lanka and meet the Minister soon.
The second meeting of commerce secretary level talks between India and Sri Lanka was held in January 2014 in New Delhi, India.
Minister Bathiudeen welcomed an official Secretary level delegation in the near future and said he has instructed his Ministry officials to take the meetings forward.