Sri Lanka urged to relax exchange controls

July 11, 2008 (LBO) – A top Sri Lankan businessman whose companies have invested overseas says the government should relax exchange controls to make it easier for local firms to invest abroad, especially India with which trade deals are being struck. “We need a system where the central bank gives us freedom to invest in India without too much of documentation,” said Mano Selvanathan, whose firms have invested in a brewery in India and oil palm plantations in east Asia.

There was no use having trade deals that make investment easy “on paper” if actual work to set up businesses overseas is blocked by cumbersome and time-consuming government regulations, he said

Due to exchange controls Sri Lankan firms wanting to invest abroad need central bank approval which businesses have complained can take a long time.

Selvanathan said that in India, investments abroad up to a certain limit are allowed without too much red tape.

Selvanathan acknowledged the need for rules but said they should be made easier to encourage businesses to expand overseas.

“We can’t be standing in queues to get approvals to get into India,” he told seminar on the Comprehensive Economic Partnership Agreement (CEPA) to be signed between India and Sri Lanka next mo