Sri Lanka’s small and medium-sized businesses are mulling bringing in new technology and machinery from India to revive the country’s industrial base, according to the Confederation of Micro, Small and Medium Industries (COSMI).
“We are thinking of bringing in new technology and machinery from India to revive Sri Lanka’s sick industries.
Metal industries, food processing, coconut, plastic and rubber and value addition for tea are high potential sectors for partnership for Indian investors,” COSMI Founder President Nawaz Rajabdeen said.
“Members of Confederation of Indian Micro, Small and Medium Enterprises (CIMSME) can join us in this. We at COSMI can form affiliations with SIMSME to support our SMEs. We can also facilitate our SMEs to visit and see Indian machinery and technologies with a view to acquire them to be competitive locally and globally,” he added.
Rajabdeen noted that non-tariff barriers (NTBs) have hindered Sri Lankan exports to India –some coming from local SMEs. India is Sri Lanka’s fourth largest export destination. Some 4, 400 product lines have been given to Sri Lanka tariff-free by India under Indo-Lanka Free Trade Agreement (ILFTA) and 65 percent of products exported from India to Sri Lanka come in out of ILFTA.
“Many Sri Lankan clusters depend for some of their raw material coming as imported material. Around 35 percent domestic value addition hamper them from the very start.
“If they are unable to send their products as exports to their closest and neighbouring markets without 35 percent domestic value addition, it is clear the popular belief that FTAs are helpful for cluster development may not be really true. For Sri Lankan SMEs and SME clusters, the great opportunity of tree trade based exports has also become their greatest obstacle,” Rajabdeen stressed. Sri Lankan exports to India have increased substantially in the past 18 years since 2000 –the year ILFTA came into force. In 2019, bilateral trade between India and Sri Lanka totaled to US$ 4.59 billion. Exports from India to Sri Lanka surged from US$ 600 million in 2001 to US$ 4, 495 million in 2018.