Free Trade

Jan 05, 2008 (LBO) – Sri Lanka and India have reached agreement on improving access for the island’s exports like tea to the Indian market but have yet to conclude a deal on trade in services, trade officials said. The latest round of talks between the two neighbours on a new trade deal ended in Colombo Friday with both sides agreeing on the draft text of the agreement which will now be sent for legal vetting.

“We more or less cleared the text of the agreement,” said Manel de Silva, Sri Lanka’s director general of commerce.

“Most of the MRAs (Mutual Recognition Agreements) have been more or less finalized, such as on tea export and harmonization of standards on ayurveda.”

An MRA between the tea boards of the two countries would make it easier to ship Ceylon tea to India.

“This is a very major step forward. It will make it easier for our tea to go to India,” de Silva said.

Under the deal, Indian authorities will accept reports from Sri Lankan laboratories designated by the government, eliminating the need for exporters to send samples abroad for testing.

Teas for export have to be tested to ensure they are free of chemical residues from fertilizer and pesticide application.