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| India - Sri Lanka Bilateral Trade Relations |
Bilateral economic and commercial relations between India and Sri Lanka has been on an upswing, particularly following the signing of the Free Trade Agreement (FTA) in 1998. In the last 10 years, our bilateral trade has grown manifold, and India has emerged as the largest trade partner of Sri Lanka.
An examination of bilateral trade statistics makes it amply clear that the Free Trade Agreement (FTA) has been a win-win for both sides. The overall volume of trade has increased manifold. The basket of items being traded has also expanded. Even while we suffered from global economic meltdown, our overall trade turnover reached US$ 3265 million in 2008, which is a marginal fall from the figure of US$ 3266 in 2007. In the longer perspective, this is almost a five fold increase from US$ 658 million in 2000. India has emerged as the largest source of imports and fourth largest export destination for Sri Lanka (rising from 16th rank in 2000). India is also now the largest trade partner of Sri Lanka. In terms of overall trade turnover, India is followed by USA and UK, who are largely importers of traditional Sri Lankan products such as garments and tea from Sri Lanka. In fact, India is the most balanced trade partners of Sri Lanka among the top five such partners in the sense both Sri Lankan exports and imports are rather substantial and trade turnover is not made up overwhelmingly by imports or exports as is the case with other such partners.
An indicator of relative benefits of the FTA to the two countries is that more than 90% of Sri Lankan exports gain from FTA concessions as against only 30% of Indian exports to Sri Lanka receiving the same benefits. Sri Lankan exports have grown faster than Indian exports to Sri Lanka, growing tenfold as against a fivefold increase in Indian exports since the signing of the FTA.
This expansion has happened through a very careful set of measures incorporated in the FTA that took into account asymmetries between the two economies, local socio-economic sensitivities, and revenue implications. Therefore, India opened up its tariffs in larger numbers and over a shorter time frame. A total of 4150 tariff lines were opened by India at zero duty for import from Sri Lanka between 2000-2003. Sri Lanka, on the other hand, opened up lesser tariff lines and had an extended time frame for liberalizing its tariffs. Sri Lanka opened up 1208 tariff lines at zero duty for Indian exports to Sri Lanka in 2000. Later, it has progressively liberalised its duties to reach zero-level in respect of additional 2724 tariff lines in November 2008. As of now, 1180 tariff lines remain in the Sri Lankan negative list that includes Agriculture/livestock items, rubber products, paper products, Iron and Steel, machinery, and electrical items. On the Indian side, there are 429 items in the negative list, which include garments, plastic products and rubber products etc.
Bilateral Trade Figures for last 10 years
| Year |
Imports from India |
Exports to India |
Total Trade |
|
1999
|
512
|
49
|
561
|
|
2000
|
600
|
58
|
658
|
|
2001
|
602
|
72
|
674
|
|
2002
|
835
|
171
|
1006
|
|
2003
|
1076
|
241
|
1317
|
|
2004
|
1358
|
385
|
1743
|
|
2005
|
1399
|
559
|
1958
|
|
2006
|
1805
|
489
|
2294
|
|
2007
|
2750
|
516
|
3266
|
|
2008
|
2845
|
419
|
3265
|
Main Items Exported from Sri Lanka
The main items of export from Sri Lanka in 2008 were: coffee, tea and spices (13.47%); electrical machinery and equipment (12.24%); vegetable fats and oils (10.88%); rubber and rubber products (8.53%); Residues and waste from food industry (8.03%); Machinery and mechanical appliances (4.59%); Paper/Paperboard/waste (4.54%); precious or semi-precious stones (4.5%); tugs and pusher craft (3.58%); copper and copper products (3.25%); and others (26.4%).
|
Product/Description
|
Value US$ million
|
% of Total
|
|
Coffee, Tea & Spices
|
52.94
|
13.47
|
|
Electrical Machinery & Equipment
|
48.11
|
12.24
|
|
Vegetable Fats/ Oils
|
42.76
|
10.88
|
|
Rubber & Rubber Products
|
33.54
|
8.53
|
|
Residues & Waste from Food Industry
|
31.58
|
8.03
|
|
Machinery & Mechanical Appliances
|
18.06
|
4.59
|
|
Paper / Paperboard - Waste
|
17.84
|
4.54
|
|
Precious or Semi - Precious Stones
|
17.68
|
4.50
|
|
Tugs and Pusher Craft
|
14.07
|
3.58
|
|
Copper & Copper products
|
12.78
|
3.25
|
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Main Items exported from India to Sri Lanka
The main items of export from India in 2008 were: Mineral fuels/oils (34.39%); Vehicles other than Railway or Tramway (9.7%); Sugar (5.7%); Cotton (4.95%); Iron & Steel (3.71%); Pharmaceutical products (3.41%); Machinery and mechanical appliances (2.94%); Paper and Paperboard (2.42%); Edible vegetables (2.36%); Copper and copper products (2.25%); and others (28.17%).
|
Product/Description
|
Value US$ million
|
% of Total
|
|
Mineral Fuels / Oils
|
917.68
|
34.39
|
|
Vehicles Other than Railway or Tramway
|
258.99
|
9.70
|
|
Sugar
|
152.02
|
5.70
|
|
Cotton
|
132.18
|
4.95
|
|
Iron & Steel
|
98.93
|
3.71
|
|
Pharmaceutical products
|
91.09
|
3.41
|
|
Machinery and Mechanical Appliances
|
78.53
|
2.94
|
|
Paper and paperboard
|
64.62
|
2.42
|
|
Edible Vegetables
|
62.99
|
2.36
|
|
Copper & Copper Products
|
59.94
|
2.25
|
--------------------------------------------------
Sri Lanka’s Export to the World – Top Ten Items in 2008
(Value in US Dollars Million)
|
HSCO
|
Description
|
VALUE
|
|
H.090240
|
Coffee, Tea mate and Spices
- Tea, whether or not flavored
- Other black tea (fermented) and other partly fermented tea
|
615
|
|
H.090230
|
Coffee, Tea mate and Spices
- Tea, whether or not flavored
- Other black tea (fermented) and other partly fermented tea, in immediate packings of a content not exceeding 3 kg.
|
456
|
|
H.710239
|
Natural or cultured pearls, precious or semi precious
- Diamonds, whether or not worked, but not mounted or set
- Others
|
292
|
|
H.610910
|
Articles of apparel & clothing accessories, knitted or crocheted
- T-shirts, singlets and other vests, knitted or crocheted
- Of Cotton
|
277
|
|
H.621210
|
Articles of Apparel and clothing accessories, not knitted or crocheted
- Brassieres, girdles, corsets, braces, suspenders, garters and similar articles and parts thereof, whether or not knitted or crocheted
- Brassieres
|
271
|
|
H.620342
|
Articles of Apparel and clothing accessories, not knitted or crocheted
- Men's or boys' suits, ensembles, jackets, blazers, trousers, bib and brace overall, breeches and shorts (other than swimwear)
- Of Cotton
|
243
|
|
H.620462
|
Articles of Apparel and clothing accessories, not knitted or crocheted
- Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear)
- Of Cotton
|
213
|
|
H.620469
|
Articles of Apparel and clothing accessories, not knitted or crocheted
- Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear)
- Of other textile materials-silk
|
201
|
|
H.401290
|
Rubber and articles thereof
- Retreaded or used pneumatic tyres of rubber, solid or cushion tyres, tyre treads and tyre flaps, of rubber
- Other
|
201
|
|
H.610829
|
Articles of Apparel and clothing accessories, knitted or crocheted
- Women's or girls' slips, petticoats, briefs, panties, night dresses, pyjamas, negligees, bathrobes, dres-sing gowns and similar articles, knitted or crocheted
- Of other textile materials
|
142
|
|
|
Others
|
5,268
|
|
|
Total
|
8,179
|
Sri Lanka’s Imports from the World – Top Ten Items in 2008
(Value in US Dollars Million)
|
HSCO
|
Description
|
VALUE
|
|
H.270900
|
- Mineral fuels, mineral oils and products of their distillation
- Petroleum oils and oils obtained from bituminous minerals, crude
|
1,319
|
|
H.271019
|
- Petrolem oils and oils obtained from bituminous minerals other than crude; preparations not elsewhere specified or included, containing by weight 70% or more of petroleum oils or oils obtained from bituminous minerals, these oils being the basic constituents of the preparation, other than waste oils
- Other, aviation turbine fuel, diesel, base oil
|
1,263
|
|
H.100190
|
- Wheat and meslin.
- Wheat grain
|
391
|
|
H.710231
|
- Diamonds, whether or not worked, but not mounted or set
- Unworked or simply sawn, cleaved or bruted.
|
290
|
|
H.310210
|
- Mineral or chemical fertilisers, nitrogenous.
- Urea, whether or not in aqueous solution
|
290
|
|
H.271011
|
- Petrolem oils and oils obtained from bituminous minerals other than crude; preparations not elsewhere specified or included, containing by weight 70% or more of petroleum oils or oils obtained from bituminous minerals, these oils being the basic constituents of the preparation, other than waste oils
- Light oils and preparations
|
275
|
|
H.040221
|
- Milk and cream, concentrated or containing added sugar or other sweetening matter
- Not containing added sugar or other sweetening matter
|
252
|
|
H.170199
|
- Cane or beet sugar and chemically pure sucrose, in solid form
- other, white crystalline cane sugar
|
189
|
|
H.252329
|
- Portland cement, aluminous cement, slag cement, super sulphate cement and other similar hydraulic cements whether or not coloured or in the form of clinkers
- Other ordinary portland cement
|
152
|
|
H.710812
|
- Gold (including gold plated with platinum) unwrought or in semi-manufactured forms, or in powder form
- Other unwrought forms
|
136
|
|
|
Others
|
9,080
|
|
|
Total
|
13,637
|
Percentage of Total Sri Lanka Trade with India
|
|
Exports (%)
|
Imports (%)
|
|
2002
|
3.57
|
13.81
|
|
2003
|
4.79
|
16.49
|
|
2004
|
6.84
|
17.25
|
|
2005
|
8.95
|
17.32
|
|
2006
|
7.17
|
18.47
|
|
2007
|
6.63
|
24.43
|
|
2008
|
5.10
|
20.80
|
Top Trade Partners of Sri Lanka – Exports
|
Description
|
2007
|
2008
|
|
United States
|
1,979
|
1,886
|
|
United Kingdom
|
1,017
|
1,090
|
|
Italy
|
391
|
445
|
|
India
|
516
|
418
|
|
Belgium
|
407
|
409
|
|
Germany
|
437
|
405
|
|
United Arab Emirates
|
210
|
255
|
|
Russian Federation
|
202
|
220
|
|
France
|
176
|
180
|
|
Others
|
2,320
|
2873
|
|
Total :
|
7,654
|
8181
|
Top Trade Partners of Sri Lanka – Imports
|
Description
|
2007
|
2008
|
|
India
|
2,750
|
2,837
|
|
Singapore
|
1,108
|
1,600
|
|
Iran
|
785
|
1,197
|
|
China
|
921
|
1,108
|
|
Hong Kong
|
729
|
694
|
|
United Arab Emirates
|
371
|
463
|
|
Japan
|
415
|
424
|
|
Malaysia
|
350
|
358
|
|
Others
|
3,961
|
4959
|
|
Total :
|
11,390
|
13,640
|
|
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