Sep 28, 2016 (LBO) – Sri Lanka will see investment of more than two billion US dollars in the next two to four years from India, a visiting Indian minister here to discuss the Economic Technology Cooperation Agreement, said.
“We are looking at investment in the tune of 2-3 billion US dollars in the next two to four years,” Nirmala Sitharaman, Minister of (Independent Charge) for Commerce and Industry of India, said Tuesday.
“Areas like real estate, industry, energy, infrastructure and housing are what we are looking at.”
Sri Lanka is currently at the formulating stage of an “Economic Technology Cooperation Agreement” with India, but several local professional associations have raised concerns about the flow of professionals between the two countries.
“This agreement can go ahead only with mutual trust. The negotiation has to be done in detail and without any kind of pressure on the timeline,” the Indian minister said.
“I wish to state here, whilst the opportunities exist, synergies between the two countries are very repeatedly underlined by business and it is important to recognise that this negotiation has to be done in detail.”
“We value the agreement, but of course it has to be done taking everybody on board and talking on every issue of concern for both sides. It has to be done with a great sense of ease and comfort,” she added.
Malik Samarawickrama, Minister of International Trade and Development Strategies, speaking at the press conference said that the Government will push to finalize ETCA as soon as possible.
“We will try to get this done as soon as possible as this will open up a market of 1.2 billion for us. The timeline could extend to March 2017 from the previous December deadline.”
Anwsering repeated question from reporters he said the government will not consider Mode 4 of the WTO General Agreement on Trade in Services (GATS) which allows professionals to provide a service in another country.
“Instead, the ETCA agreement will seek to boost cooperation in technical areas, scientific expertise and research amongst institutions, boost standards of goods and services able to compete on the global market and improve opportunities for manpower training and human resource development.”
“Without an improvement in training we may experience shortages in the future.”
Around 65 percent of Sri Lanka’s exports to India falls under the Free Trade Agreement, but just 25-30 percent of goods from India fall under the FTA. Sri Lanka also experiences non-tariff barriers when exporting to India.
The government plans to improve access for Sri Lankan goods to India under this agreement, he said. Seventy percent of transshipment and 40 percent of revenue from flights are linked to India, and the government aims to boost these services areas too.
Sitharaman said that the issues faced by Sri Lanka under the current Indo-Lanka Free Trade Agreement (FTA) needed to be addressed before any new agreement.
“It is being talked about, it is important and we are willing to deal with an open mind.”
“The passing of the Goods and Services Tax (GST) in India has made it one market with easier access for investment,” she added.