Apr 02, 2015 (LBO) – Sri Lanka should look at diversifying its export market from its Europe centric and north American trade habits and move towards exploring a more lucrative regional export markets, a senior official said.
“That Europe centrist approach is still there in Sri Lanka, simply because it is the number one market in Sri Lanka and still continues to be so, followed by north America but we have very good market opportunities in the region,” R.D.S Kumararatne, director general, Department of Commerce Sri Lanka said.
“India has 300 million people who are from the new upper income, middle class and their consumption patterns have drastically changed and they are looking for new products,”
“Exporters should be aware and explore the possibilities in the SAFTA. This agreement gives market access to seven countries in the region.”
SAFTA is the South Asian Free Trade agreement created for a free trade area of 1.8 billion people in Afghanistan, Bangladesh, Bhutan, India, Maldives,Nepal, Pakistan and Sri Lanka.
The SAFTA agreement came into force on 1 January 2006 and is operational following the ratification of the agreement by the seven governments.
Kumaraatne asks, are we using the Free Trade Agreements (FTAs) enough? we should get the maximum out of existing FTAs while they last.”
“You (exporters) should also not neglect to diversify product lines available under FTAs.”
The director general was addressing a seminar organized by the Ceylon Chamber of Commerce on “Expand your exports through FTAs and GSP schemes” in Colombo, Wednesday.
The European Union (EU) is Sri Lanka’s largest export destination, absorbing 36 per cent of its exports.
Textiles and clothing account for more than half of Sri Lanka’s export value with machinery, rubber-based goods, jewellery and agricultural products making up for the rest.
According to statistics Sri Lanka’s bilateral trade with India in 2011 amounted to 4.86 billion US dollars, which is about 66 per cent higher than 2010.
In 2011, India’s exports to Sri Lanka amounted to 4.3 billion US dollars, which is an increase of about 75 per cent compared to 2010.
Bilateral trade in 2012 amounted to 4.0 billion US dollars, registering a decline of 17.59 per cent as compared to corresponding period of 2011.
The two countries have also resumed discussions on a Comprehensive Economic Partnership Agreement and steps to finalize the Agreement are expected to be taken in the near future.
Sri Lanka has long been a priority destination for direct investment from India. India is among the four largest overall investors in Sri Lanka with cumulative investments of over 800 million US dollars.
India was the second largest foreign direct investor in Sri Lanka in 2011, with an investment of 147 million US dollars (out of a total inbound FDI of 1057 million US dollars).
Our main investments are in the areas of petroleum retail, hospitals, telecom, vanaspati, copper and other metal industries, real estate, telecommunication, hospitality & tourism, banking and financial services, IT and food processing (tea & fruit juices).