Sri Lanka has ruled out an immediate lowering of its high import tariffs on automobiles that has hurt exports from India, but said it may consider such a move once it is able to strike a balance of trade with its neighbour.
India had last week raised the issue in Colombo through its mission after the Commerce Ministry expressed concern over the hike in import tariff.
"The fact of the matter is that it (hike in import tariff) is not directed to Indian products. We have a balance of payment problem because our income from exports was not enough," Sri Lankan Senior Minister for International Monetary Cooperation and Deputy Minister of Finance and Planning, Sarath Amunugama told PTI.
About three times of income from exports was going out for particularly oil and debt repayment but also for luxury and semi-luxury items like vehicles, he added.
Asked if his country was willing to consider India's request to lower the import tariff as its exports are getting impacted, he said: "We can't afford it at the present moment but eventually we will... The need really is to improve our exports and India can help by buying more Sri Lankan products then there will be a balance in the trade."
According to Society of Indian Automobile Manufacturers (SIAM), the neighbouring country has increased import duties on vehicles by almost 100 per cent, which has adversely impacted exports from India.
Last year, India had exported vehicles worth $6 billion out of which automobiles worth $800 million had been sold in the Sri Lankan market. Earlier, the increase in duties affected exports of small cars, two-wheelers and three-wheelers from India but very recently Sri Lanka had increased duties on sports utility vehicles as well.
Justifying the step taken, Mr Amunugama said: "It so happened that many of the low-end vehicles, cheaper vehicles were being manufactured in India but those are the popular ones, so a large outflow of foreign exchange as a result.
"So what we are trying to do is, till we stabilise the situation, we have to put these taxes to prevent the outflow of foreign exchange. Once we are more stable, I think we can take another look at this," he added.
While India's exports to Sri Lanka stood at $4.37 billion in 2011-12, imports aggregated at $721 million in the same period.(NDTV)
Comments - 15
Aney Machang Wednesday, 19 December 2012 06:35 AM
The GOSL is only concerned about the LAMBOS that bombard the nights here to keep the whiz kids happy and gay!
A.Guruge Wednesday, 19 December 2012 06:54 AM
I am vehicle importer myself & badly affected.But I support Minister Mr.Amunugama for his patriotic stand. India chases out all our investors. But they take all our precious foreign exchange by supplying inferior vehicles and hardly invest here except on paper. At least what Chinese investors do is visible within years. We know what we lost on Vanaspathi. Our Treasury should think ten times before touching Indian Credit.
mike.shaans Wednesday, 19 December 2012 07:31 AM
All the hassles for the common man The Big brothers and the educated bunch of thugs enjoys the benefits
Mike Tuesday, 18 December 2012 10:47 AM
rather bringing Indian Maruti's to Sri Lanka, Sri Lanka would encourage some hceap Korean cars sucnh as Hyundai and Kia which more relailable than Maruti
Publik Abilik Tuesday, 18 December 2012 12:00 AM
But Carlton SC managed to get concessions of 99mil importing sports cars and no one talks of that? via DM Android App
Jagath Leanage Tuesday, 18 December 2012 11:08 AM
Mike, Absolutely correct. Indian vehicles are low in quality. So govt should think twice. What will happen to people who brought vehicles during this period?Are they have to suffer?
arjuna Tuesday, 18 December 2012 11:08 AM
What happened to our Investors in India always face higher tariffs taxes and also legal actions favor to them. very good move of the government and the minister. Still they try to dump their messy 3 wheelers.
sayed Tuesday, 18 December 2012 11:09 AM
India simple logic millions of Indian Car’s and three wheelers have been sold in SL now you can increase the price for the spare parts.
buffaloa citizen Tuesday, 18 December 2012 11:08 AM
If you are not biased, the Indian cars such as Nano and Maruthi are the moderately priced in comparison to their limited quality and standards. The only equivalent are the Chinese Q&Q which is not road worthy after 5 years whereas you may see Maruthi's that are 10 years and still running.
JRDW Tuesday, 18 December 2012 11:11 AM
Didn't you think of the fuel costs of the korean cars? i am no fan of indian cars but then maruti and tata cars fuel is very economical...
PoliticallyIncorrect Tuesday, 18 December 2012 11:17 AM
add to that Malaysian Perodua - cheap fuel efficient but safe and reliable
PRASANNAJIT Tuesday, 18 December 2012 11:23 AM
Ask India to build racing cars.
Game Kolla Tuesday, 18 December 2012 11:32 AM
Most of the local manufacturing industries have been closed. In early 1970s there were few motor car assembly units in Srilanka..such as Upali Fiat, Mazda , Mitsubishi Colt etc...We must start motor vehicle manufacturing establishments here.
bingo Tuesday, 18 December 2012 11:31 AM
they will be the fastest cars to take you to the heaven
Ram Wednesday, 19 December 2012 10:32 AM
Ned of the hour....
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.