In a new development in t he on-going Indo-Lanka trade dialogue, an independent survey team has arrived in Colombo to map barriers to the free trade agreement (FTA) trade and the first round of this groundbreaking bilateral study would conclude in early 2015.“After the FTA was entered into, bilateral trade i mproved tremendously. I welcome your efforts to identify aspects where improvements are needed in our free trade dialogue,” Industry and Commerce Minister Rishad Bathiudeen said.Minister Bathiudeen was addressing the visiting independent study team from India led by Institute of Social and Economic Change (ISEC), Bangalore, India Director Prof. Binay Kumar Pattnaik in Colombo yesterday.Pattnaik is in town with his sevenmember team, which is tasked by the Asia Foundation with the mapping of non-tariff barriers (NTBs) in the historic Indo-Lanka FTA.
“We are an independent, semigovernment and Asia Foundationpromoted study team consisting of three PhDs and other researchers from various Indian think-tanks, including ISEC. I want to stress that this study is not done by the government of India but by autonomous research institutions in India, including ISEC and Centre for Policy Research (CPR),” Pattnaik said.He added, “Ever since we signed the FTA, there is substantial improvement in bilateral trade. We, as a study team, prefer to work on more specific issues in this study rather than of talking of broad trade policy issues.We want to identify areas of concern - NTBs in the FTA process - so that they could be listed, rectified and workable solutions are devised.
It is time this NTB issue is taken head-on. The findings of the first round of our study will be published in early 2015 after which we will select a few focal areas to study in depth in the second round. We started this effort in May 2014 in India. At this moment, our visit to Sri Lanka is a fact-finding one and we will return for bigger work. We already met with the Chamber of Commerce in Colombo and Commerce Department through whom we will be speaking to Lankan exporters and importers to identify their issues. ISEC is the lead agency in the study along with CPR; on its part, ISEC itself has engaged five full-time researchers on this study. The cost of first round is US $ 20000.”
According to the Commerce Department of Sri Lanka, India became the biggest product supplier to Sri Lanka in 2013, followed by China. Total trade ‘under ISFTA’ stood at US $ 748.2 million and it jumped by a strong 40 percent in 2013 from 2012’s US $ 536 million.Addressing Pattnaik, Minister Bathiudeen said, “Last year, India became the biggest supplier to Sri Lanka with more than US $ 3 billion exports to Sri Lanka. At the same time, after the FTA, our exports to India increased greatly. Sometimes, our exporters face certain concerns, in the form of NTBs. Removing such NTBs will enhance our bilateral trade significantly. What is more important is we can also identify non-exploited product lines of FTA at both sides and start moving these products too.”
Under the FTA, more than 4000 product lines are now open ‘tariff free’ to exporters at both ends. In 2013, total Indo-Lanka trade stood at US $ 3.636 billion with imports from India reporting no less than US $ 3.09 billion and 65 percent of Lanka’s total exports to India were ‘exports under ISFTA’ at US $ 354 million.The balance of trade between India and Sri Lanka remains in favour of India due to the increased outlay on major import items such as petroleum products and automobiles.