Mar 13, 2015 (LBO) – Sri Lanka should be visited regularly by India as neighbors and collaborate in developing economic cooperation in both countries in order to get the advantage of ocean economy, Prime Minister of India Narendra Modi said at a gathering in Colombo.
“This is how it should be between neighbours. We should meet regularly,” Modi said.
“It helps us understand each other better; find solutions to mutual concerns; and, move our relationship forward,”
“Economic ties are a key pillar of our relationship,”
“The progress we have made reflects our shared commitment to stronger economic cooperation,”
“The ocean economy is a new frontier that holds enormous promise for both of us. It is a priority for our two countries,” he said.
“Our decision to set up a Joint Task Force on Ocean Economy is a significant step, especially because of our proximity,”
“India is privileged to be a development partner for Sri Lanka.”
He said the trade between Indian and Sri Lanka has seen impressive growth over the past decade and promised to address concerns about Indo –Lanka trade.
“As I said in Delhi, we will try and address them,” Modi said.
“The agreement today on cooperation between our customs authorities is a step in that direction. It will simplify trade and reduce non-tariff barriers on both sides.”
Bilateral trade between India, Sri Lanka’s largest trade partner and Sri Lanka stood at 4.6 billion US dollars in 2014 data showed.
Total trade between both countries was 3.63 billion dollars in 2013 and exports from Sri Lanka to India was 543.3 million dollars while total imports from India was at 3.09 billion dollars.
More than 60 percent of Sri Lanka’s exports to India were under Indo-Sri Lanka Free Trade Agreement (ISFTA).
Critics says 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 unfavourable balance of trade narrowed to 2.54 billion dollars in 2013, from 2.95 billion dollars in 2012.
Energy Hub Support
“We are not just looking at addressing problems. We are also focusing on new opportunities,” Modi said during his speech.
He said India will help the Indian Ocean Island to build a petroleum hub in Trincomalee which located in eastern province of the Island.
“Today, Lanka IOC and Ceylon Petroleum Corporation have agreed to jointly develop the Upper Tank Farm of the China Bay Installation in Trincomalee on mutually agreed terms,” Modi said.
“A Joint Task Force will be constituted soon to work out the modalities. India stands ready to help Trincomalee become a regional petroleum hub,”
Modi said that he also look forward to early commencement of work on the ground in the Sampur Coal Power Project in the Trincomalee district which was decided to implement by the last regime due to the increasing demand for electricity in the Eastern Province.
The total investment is around 500 million US dollars for the project. Ceylon Electricity Board and National Thermal Power Corporation Ltd of India acts as joint venture partners for the project.
Modi said India will provide a fresh Line of credit of up to 318 million US dollars for the railways sector which will be used to procure rolling stock, and to restore and upgrade existing railway track.
India also will provide assistance for the construction of the Rabindranath Tagore auditorium at Ruhuna University in Matara. Modi said the Reserve Bank of India and the Central Bank of Sri Lanka have agreed to enter into a Currency Swap Agreement of 1.5 billion US billion.
“This will help keep the Sri Lankan rupee stable.” He said.