Sri Lanka eyes free trade deal with India by 2024 end
Colombo will also work out similar FTAs for countries such as Indonesia, Malaysia, Vietnam, and China too by the year’s end, its finance minister Ali Sabry told reporters.
A demonstrator waves Sri Lanka’s national flag as he demonstrates the country’s economic and political crisis on April 26, 2022 in Penideniya, Sri Lanka. (Photo by Abhishek Chinnappa/Getty Images)
SRI LANKA on Tuesday (6) said it has plans to establish a free trade agreement (FTA) with India by the end of 2024, its foreign minister Ali Sabry said in national capital Colombo as the cash-strapped island-nation tries to spur economic growth.
Similar FTAs would be worked out for countries such as Indonesia, Malaysia, Vietnam, and China too by the year’s end, Sabry told reporters.
These agreements are expected to open up new markets for the cash-strapped Sri Lankan businesses, contributing directly to the nation’s economic growth at a time when the country’s government is struggling to restructure its external debt on the one hand and has raised utility rates and taxes on the other.
Read: After Thailand & Sri Lanka, Malaysia too grants visa-free entry for Indians
Sri Lanka and India resumed talks on the Economic and Technology Cooperation Agreement in Colombo at the 12th round in October last year. The original talks were stalled after several rounds of talks between 2016 and 2018 due to political and trade union opposition.
Last week, Sri Lanka inked an FTA with Thailand.
Read: World Bank offers prop for Sri Lanka’s stressed banks
“This has already provided Sri Lanka access to a USD 2.2 billion market, representing a significant advancement,” the foreign minister said.
“In the 1990s, exports contributed a significant 30 per cent to Sri Lanka’s GDP, compared to 15 per cent today,” Sabry said adding, “This decline reflects a missed opportunity to capitalise on the global market, unlike neighbouring countries that actively pursued FTAs.”
“The main reason behind Sri Lanka’s export struggles is its limited market access. While focusing primarily on the domestic market, countries like Vietnam and Bangladesh actively expanded into larger international markets through FTAs. This strategic move fuelled their export-driven growth, leaving Sri Lanka behind,” Sabry added.
In April 2022, the then president Gotabaya Rajapaksa was thrown out through a public agitation and the incumbent president Ranil Wickremesinghe took over. He put in place unpopular economic reforms to supplement a bailout from the International Monetary Fund.
(With PTI inputs)