Monday, 22nd September 2014
A staggering 4,000 product lines remain unutilised under the Indo-Lanka Free Trade Agreement despite its existence for over a decade.
“Almost 4,000 product lines that have concessions under Indo Lanka FTA is not being utilised by Sri Lanka exporters and this needs to be addressed by the business chambers without just being critical on new partnerships pursed by the country at policy level,” Country Head for Turner Investment (USA) – Asia Pacific Rohantha Athukorala had told the Southern Chambers of Commerce, business heads and entrepreneurs recently.
“The fact of the matter is that we as a nation are not competitive enough to drive strong business globally. The recent drop in the ranking as per the Global Competitiveness ratings released by the World Economic Forum where Sri Lanka has dropped from a commanding 52 position in 2011 to a 73 position in 2014 are indications that other nations are getting more competitive,” emphasised Athukorala.
His comments come hot on the heels of Sri Lanka and China announcing plans last week to fast track a FTA and much debate going into its merit especially in the context of the Indo Lanka FTA hadn’t delivered desired progress.
Athukorala, who was the youngest Chairman of the Sri Lanka Export Development Board sometime back and who continues to serve the EDB as a Board Director for the past six years, said there are many non-trade barriers that need to be addressed but also emphasised that Sri Lankan exporters must become very aggressive to compete in the Indian market as it is essentially protection oriented.
“Any country goes through this phase but it’s only through dialogue with policy makers and becoming competitive that we can make exports to India reach a billion dollars, which is possible given that we are poised to cross the 600 million dollars of business with India this year,” said Athukorala. According to him, currently 10 products comprise the basket of exports from Sri Lanka and account for 90% of exports earnings from India. Exports from strategic sectors such as apparel and tea are negligible.
“What’s interesting is that the non-FTA exports from Sri Lanka are at a low ebb of $ 50 million which is the same as in the year 2000 when the FTA with India came in to force whilst the non FTA products exports from India to Sri Lanka which was only $ 500 million in the year 2000 is today a sizable $ 2 billion. This would mean that without the FTA Sri Lankan exports to India would have remained stagnant whilst Indian exports which are largely on the non FTA route wouldhave grown four times from the year 2000 level,” pointed out Athukorala.
“Hence, majority of the trade has happened outside the FTA which needs to be carefully analysed and how one can have a better utilisation of the FTA,” he added.
“This explains the future potential the Sri Lankan exporters have in the Indian market if the other 4,000 product lines are pursued,” said Athukorala and added, “provided that we become aggressive and policy makers ensure that the non tariff issues are addressed. With this experience we will have a more efficient FTA with China.”
From : http://www.ft.lk/2014/09/22/4000-product-lines-unutilised-under-indo-lanka-fta/
