India became a favourite source of supply replacing other traditional suppliers like Japan, he told a seminar organised by the IPS to review the Indo-Lanka free trade agreement (FTA).
"Most were not made in Sri Lanka in a large scale or in the quality required, especially machinery," he said.
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"In that context India became a low cost supplier and contributed to giving a better deal to producers through cheaper machinery imports enabling them to reduce cost of production in manufacturing whether for export or as import substitution products."
Sri Lanka's import substitution industries remained protected under the deal by being placed in the 'negative list' under which no tariff concessions were given.
These include agriculture, fishe