India seems eager to revise its economic terms with Srilanka. India’s envoy to Colombo, Gol Baglay, identified potential sectors of economic cooperation for both countries. The sectors include infrastructure, connectivity, IT, agriculture, manufacturing, pharmaceutical, tourism, and education.
Deepening Economic Collaboration between India and Srilanka
On Tuesday, a virtual event titled “Deepening Economic Collaboration between India and Srilanka” was organized. This event was arranged by the Federation of Indian Chambers of Commerce and Industry (FICCI) in association with the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKIIRSS).
Moreover, high profile officials from both parties attended the meeting. Baglay urged the need for accelerating an unprecedented economic collaboration at large, with regard to the preexisting bilateral ties. Especially in the present times, when the world is battling a deadly pandemic.
Call for future-Oriented Policy
Furthermore, Mr Baglay added that future-oriented policies will serve right if coupled with the economic strength of both countries. This will help balance the economic security in the region. Bringing the economic entities together from both sides will increase capacity, create employment, and increase prosperity, as he mentions.
Trade Outlook between India and Srilanka
Additionally, Srilanka\’s trade with India in 2018 was worth US$4.93 billion. With exports from India amounting to US$ 4.16 billion. According to the source, Srilanka traded US$ 767 million in exports with India.
Export Items from Srilanka to India include Base Oil, Poultry feeds, Areca nuts, (waste and scrap) paper or paperboard, Pepper, Ignition Wiring Sets, Copper wire, Marble, travertine, and alabaster.
Similarly, imported Items from India Include Gas oil/ Diesel, Motorcycles, Pharmaceutical Products, Portland cement, Semi-finished products of Iron, Military weapon, Fuel oil, Rice, Cement clinkers, Kerosene Type jet Fuel
The cumulative investment from India reaches to about USD 1.239 billion.
Foreign Direct Investment (FDI)
Moreover, the sector attracting FDI (foreign direct investment) from India remains Significant. Including petroleum retail, IT, financial services, real estate, telecommunication, hospitality & tourism, banking and food processing (tea & fruit juices), copper and other metal industries), tires, cement, glass manufacturing, and infrastructure development (railway, power, water supply).
India claims to have committed $3 billion to Srilanka in total. The total development assistance grants total to $560 million.
Srilanka’s take on the subject
Srilanka faces retaliation from leftist parties in its decision to execute the Colombo Port project with India. However, India assures the Srilankan government to take things forward in a mutually beneficial way.
In addition to this, the opposition expresses concerns over India dragging its feet into countries’ internal affairs and sovereignty. President Gotabaya Rajapaksa set up a ‘review’ committee in late June. However, the government does not seem to be following the matter in favour of opposition demands.
Rescheduling Debt with Neighbor India
Thus, Srilanka is reported to be holding talks with India while keeping it confidential. The subject pertains to rescheduling a debt worth $900 million to its name. As the Prime minister, Minister Mahinda previously discussed this in his visit to India.
The Indian Mission reported that India is holding “close and constructive” discussions with Srilanka, on Colombo’s pending requests for rescheduling its debt repayment and for currency swap facilities under bilateral and SAARC arrangements, cites Indian Media source, The Hindu.
