India says private sector critical to boost bilateral ties; overcome challenges from COVID pandemic

Deputy Indian High Commissioner Vinod K. Jacob 

India’s Deputy High Commissioner Vinod K. Jacob on Wednesday emphasised that the private sector is critical for the successful expansion of economic ties between India and Sri Lanka and jointly overcoming the challenges emerging from the COVID-19 pandemic. He made this observation during his speech as Guest of Honour at the Most Admired Companies 2020 Awards ceremony organised by CIMA, International Chamber of Commerce Sri Lanka and the Daily FT at the BMICH. 

Following are excerpts:

“I am honoured to participate in today’s award ceremony of the ten most admired companies of Sri Lanka organised by the International Chamber of Commerce Sri Lanka, Chartered Institute of Management Accountants and the Daily Financial Times. Let me begin by acknowledging the Chief Guest and other dignitaries. I compliment the organisers for the excellent program. I congratulate the award winners of this year 2021 and wish them all the best in their future endeavours.

“I would like to make use of this opportunity to share my views on recent developments in the Indian economy and the current snapshot of some important elements of the India-Sri Lanka bilateral economic relationship. 

“In 2020, Government of India provided three stimulus packages at a combined value of $ 405 billion or nearly 15% of India’s GDP to assist the most vulnerable sections of the Indian society during the COVID-19 pandemic. 

“Earlier this month, Finance Minister of India Smt. Nirmala Sitharaman presented the Union Budget for 2021-22 which also happened to be India’s first digital budget with special focus on dealing with the challenges triggered by the COVID-19 global pandemic. 

“The Finance Minister’s latest budget presented a vision for the actualisation of Atmanirbhar Bharat or Self Reliant India through six key pillars: (1) Health and Wellbeing, (2) Physical and Financial Capital, and Infrastructure, (3) Inclusive Development for Aspirational India, (4) Reinvigorating Human Capital, (5) innovation and R&D (6) Minimum Government and Maximum Governance. 

“According to India’s Economic Survey 2021, the projection for real GDP growth is 11 % in 2021-22 which is in line with the IMF’s estimates of real GDP growth of 11.5 % in 2021-22 and 6.8% in 2022-23. India has also set a $ 5 trillion target for its economy in financial year 2024-25. With strong rebound expected in the second half of financial year 2020-21, the Indian economy is well on course towards realising these figures. 

“In the past year economic innovation has enabled Indian business and industry to step up manufacturing of masks, PPE kits, ventilators and development of vaccines. In line with the commitment of Prime Minister Narendra Modi at the UN General Assembly in 2020, India is using its vaccine production and delivery capacity to help all humanity. We have given particular attention to our neighbours. 

“You all would be aware of ‘Covishield’ and ‘Covaxin’ vaccines that are currently being administered in India. A plane load of 500,000 vials of vaccines arrived in Colombo on Duruthu Poya Day last month. Probably because of the success of this initiative, I am given to understand that Sri Lanka is placing large scale orders for more vaccines from India. Having seen at closed quarters, the benefits of jointly fighting COVID-19 related challenges, I am confident that both countries can deepen our cooperation in this field. One of the lessons learned is that while dealing with public health matters as important as vaccines, it is imperative to respect the national regulator’s freedom and competence. I would like to commend the professionalism of Sri Lankan authorities who cut no corners and yet provided necessary approvals in just about a week to Covishield. 

“Prime Minister Narendra Modi is deeply committed to making India-Sri Lanka bilateral ties stronger. This has been evident in the outcomes of our bilateral engagements including the visit of President Gotabaya Rajapaksa to India in November 2019, of Prime Minister Mahinda Rajapaksa to India in February 2020, the Virtual Bilateral Summit held on 26 September 2020 and most recently during the visit of External Affairs Minister, Dr. S. Jaishankar to Colombo from 5 to 7 January this year.

“The existing bilateral ties in trade, investment, and development cooperation provide a strong template for realising the leadership’s vision in the economic sphere, especially considering that India was Sri Lanka’s largest trade partner in 2019 and Sri Lanka is one of India’s largest trade partners in South Asia. We have been looking at ways to utilise complementary strengths for increasing the resilience of our bilateral trade through a better understanding of evolving requirements on both sides. 

“We have been able to reduce the trade gap in 2018 and 2019 and made our trade more balanced through such efforts. According to latest data from the Sri Lankan side, in 2020, Sri Lankan imports from India were valued at $ 3 billion while Sri Lankan exports to India were valued at $ 604.42 million. This means that the bilateral trade gap which was $ 3.39 billion in 2018 was further reduced to $ 2.40 billion in 2020. 

“Due to proximity and familiarity with Sri Lanka, Indian manufacturers can play a positive role through investments, equipment, technology, know-how, and manpower training, to enable Sri Lanka to emerge as a manufacturing and connectivity hub. The implementation of large-scale economic projects in infrastructure and energy would give a big boost to investor sentiment and promote win-win and mutually beneficial cooperation. Let me reiterate that India abides by all of its international and bilateral commitments in letter and spirit. 

“Connectivity is another crucial area which has seen good progress with the initiation of air-link between Jaffna and Chennai in 2019 and the pursuit of additional air links and ferry services. India had proposed in August 2020, the creation of an air bubble to facilitate controlled movement of certain categories of people between India and Sri Lanka. We had sent a proposal in August 2020 and I am happy to inform that we have just received the response from the Sri Lankan side.

“India is also privileged to be one of Sri Lanka’s top development partners with commitments close to $ 3.5 billion for grant projects as well as Lines of Credit. We continue to implement several projects under this umbrella, apart from moving forward on new initiatives like the $ 100 million Line of Credit for solar power projects in Sri Lanka. As a part of the commitment to support Sri Lanka’s efforts to address pandemic-related challenges, the Reserve Bank of India had provided a $ 400 million currency swap to the Central Bank of Sri Lanka in July 2020. 

“Participation of the private sector is critical for the success of all endeavours aimed at the expansion of economic ties between India and Sri Lanka and jointly overcoming the challenges emerging from the COVID-19 pandemic. We hope that Indian and Sri Lankan companies will make full use of available opportunities to forge comprehensive long-term ties, especially in context of integration with global supply and value chains.

“The private sector requires certain basic conditions for the success of its ventures, which primarily include stable and predictable regulatory and economic policies and an enabling business environment. It is important to ensure that measures aimed addressing immediate difficulties are suitably adjusted to support the need for long-term growth in trade and investment. 

“India has been a preferred partner in Sri Lanka’s journey of progress, prosperity and development and we look forward to continuing this association for jointly overcoming all common challenges in the future. I convey my best wishes to the business community of Sri Lanka for a rewarding year ahead.”