Oct 02, 2010 (LBO) – An upgraded free trade deal between India and Sri Lanka can help the island lure more investment from Indian companies who are increasingly venturing abroad, India’s envoy in Colombo said. The two countries need to have agreements that remove bottlenecks to exports by harmonising their testing, certification, quarantine and customs requirements so that their products can enter each other’s markets without delays.
“All this will require the creation of an upgraded framework for bilateral economic engagement.”
The proposed CEPA covers investment and trade in services and has provisions to solve problems in the existing trade deal, Kantha said.
But the new deal has been delayed by fears among Sri Lankan businesses and professionals that the opening up of the economy would lead to the island being flooded with Indian goods and services.
Kantha said such fears were based on misperceptions and ignorance about the CEPA and that India was not looking to use the CEPA for more access to the island’s market, which is small compared with India.
India was also aware of the differences in size between the two economies and that any upgraded economic agreement would be based on