July 6, 2006 (LBO) – India’s Commerce Minister has raised the red flag on Sri Lankan shipments of vanaspati, pepper and marble, as they are threatening to destabilise the giant neighbour’s domestic industry, the Indian embassy said in a statement Thursday. The statement comes as both nations last week concluded trade talks on forming a Comprehensive Economic Partnership Agreement (CEPA), with Colombo’s shipments of vanaspati and pepper featuring high on the agenda.
Shri Kamal Nath, India’s Union Minister of Commerce & Industry, told his Sri Lankan counterpart Jeyraj Fernandopulle late Wednesday that imports under the bilateral trade pacts should not adversely affect the domestic industry.
“Rather, such an engagement should be a win-win situation bringing economic benefits to both sides,” he was quoted saying.
Vanaspati, a vegetable cooking oil, accounts over 26 percent of shipments from Sri Lanka, with New Delhi periodically putting importing restrictions to protect India’s domestic industry.
Despite a free trade pact, Sri Lanka voluntarily capped duty free shipments of vanaspati to 250,000 metric tonnes a year, but New Delhi wants to limit it to 100,000 metric tones a year.
India tightened its grip in June, by allowing only a s