Despite the adverse impact on local industries, the Government has allowed tariff-free imports on ten categories of Indian goods, which had hitherto remained in the negative list under the Indo-Sri Lanka Free Trade Agreement, Daily Mirror learns.
It is also learnt that India has pushed for the removal of these items from the negative list of the bilateral pact. The Government, acting on a budgetary decision, has zero rated these items from November 22.
These items include pectic substances (sugar like chemical substance found in certain fruits used for making jellies and jams) Agar-agar, Mucilages (food thickeners), pet food , dental floss, trade advertising material, corrugated sheets, tiles, hard rubber, plastics, combs, hair slides etc.
In future these Indian products will be imported tariff free.
In addition to these ten categories imported from India, the Government has removed 208 other items from the negative list of the South Asia Free Trade Agreement (SAFTA) applicable to all the countries in the South Indian region.
The FTA was signed between the two countries on December 28, 1998 providing for duty free market access to both the countries on a preferential basis stage by stage.
The bilateral trade volume between the two countries has passed the US$5 billion mark. However, the volume of Sri Lankan exports to India has improved marginally raising concerns about the real benefits from the FTA to the local economy.
Industry and Commerce Minister Rishad Bathiudeen said the decision was taken after a long consultation process and India would reciprocate to Sri Lanka's move by removing some items from their negative list. However, he said he could not provide details off hand.
Mawbima Lanka Foundation, a movement promoting local products, said it would be unwise to remove some of these products such as tiles and advertising materials from the negative list without any reciprocity from India.
Foundation's Director Board Member Dr. Wasantha Bandara said the fledgling advertising industry in the country would be affected by the inflow of low-cost materials from India under the new tariff concessions.
"We have a reputed tile manufacturing industry. It could be affected by this. This is an unwise decision. The government might have done this to appease India over political reasons. We signed the agreement for the Sampur coal power project over similar reasons. Yet, India did not even attend the Commonwealth Heads of Government Meeting (CHOGM) held in Colombo recently," he said.(Kelum Bandara)