$ 2 b India-SL investment largesse

Love thy neighbour?

India’s Minister of Commerce and Industry  Nirmala Sitharaman and Development Strategies and International Trade Minister Malik Samarawickrama, Industry and Commerce Minister Rishad Bathiudeen and Acting Foreign Affairs  Minister Dr. Harsha de Silva all smiles during their press conference yesterday after successful bilateral talks - Pic by Sameera Wijesinghe

By Charumini de Silva

Stronger Indo-Lanka economic engagement built on rolling out $ 2 billion worth of investments, a speedily-concluded Economic Technology Cooperation Agreement (ETCA) and a reconstituted India-Sri Lanka CEO forum were at the core of top level discussions during the visit of Indian Commerce Minister Nirmala Sitharaman, an official said yesterday.

International Trade and Development Strategies Minister Malik Samarawickrama told reporters that the Sri Lankan Government remained dedicated to finalising ETCA as soon as possible, though the timeline could extend to March 2017 from the previous December deadline. Both sides also focused on several key investment projects including the joint development of the Trincomalee Tank Farm and Indian assistance to develop the northern Palali Airport.

Indian Commerce and Industry Minister Nirmala Sitharaman at the joint news conference gave reassurances that India would partner Sri Lanka on ETCA without any timeline constraints. Underlining that the relationship between India and Sri Lanka remained “very strong, conducive and full of mutual trust”, she noted that India would work to strengthen engagement with $ 2 billion worth of investments over the next four years in the areas of real estate, industry, energy, infrastructure and housing.

 “I wish to state here, whilst the opportunities exist, synergies between the two countries are very repeatedly underlined by business; it is important to recognise that this negotiation has to be done in detail and without any kind of pressure on the timeline. We value that agreement, but of course it has to be done taking everybody on board and talking on every issue of concern for both sides. It has to be done with a great sense of ease and comfort,” she said referring to ongoing ETCA negotiations.

Sitharaman promised that India would have the teams ready to iron out any issues that may crop up during ETCA negotiations.

“Hurdles will have to be removed and facilitation will have to happen. India is committed to having better neighbourhood relations,” she added.

The Indian Minister declined to disclose whether ETCA included wide-ranging access to services, insisting that it was the prerogative of the Sri Lankan Government whether to release such information. Samarawickrama in turn confirmed services were being “discussed and negotiated”.

“We have our view and we are discussing that. Before we conclude we will come to an agreement.”

Sitharaman emphasised that the issues faced by Sri Lankan businesses functioning under the current Indo-Lanka Free Trade Agreement (FTA) needed to be addressed before any new agreement.

“It is being talked about, it is important and we are willing to deal with an open mind,” she explained.

She also pointed out that with the passing of the Goods and Services Tax (GST), India had become one market with easier access for investment.

Sitharaman urged the Sri Lankan media to narrate the picture of the existing FTA on the basis of facts and data and not on “impressionistic views”.

“I am not here to pitch for who’s benefitting more or who’s benefiting less, but the impression prevails here that Sri Lanka is not benefiting from the current FTA. Impressionistic views are important — but matters of trade, money and balance of payment are based on statistics rather than on impression,” she stressed.  

According to data, over 70% of exports from Sri Lanka do benefit from the FTA, whereas from India 90% comes out of the FTA.

Commenting on the recently halted Sampur coal power plant, she said that it would not act as a deterrent to future investments in Sri Lanka, referring to it as “no bitter experience”.

“These are national priorities and international commitments, both of which will have to be reconciled. In this backdrop, if Sri Lanka has chosen to move out of coal and look at other renewable sources of energy, we in India, although there are difficulties, we have to sit and engage with Sri Lanka to understand how to get over this issue. Thereby both countries benefit out of it,” she said.

India will also consider Sri Lanka’s intention to move into Liquefied Natural Gas (LNG). “We are having the option of the joint working groups, which will look at the nitty-gritty of this. Supply of gas, if it comes, would be from Kochi in Kerala. There are various ways that this joint working group will look into it. We quite appreciate the speedy solution to the problem because Sri Lanka’s energy requirements are growing and it is important to respond in time.”

Noting that Indian investments are considered in wide-ranging areas such as the Palali airport, Trincomalee oil tanks, building infrastructure projects and power plants, she asserted that a huge delegation accompanied the Minister to evaluate investment opportunities.

“Lots of discussion is going on about the Trincomalee oil project. We are very clear that it is moving forward well and some kind of an understanding will be reached on how this is going to progress in phases as it cannot be done in one go. These are being worked on by both sides constructively.”

Sri Lanka’s Petroleum Minister will visit India on 5 October to carry out further discussions.

Samarawickarama, outlining the proposal of the Trincomalee oil project, said: “It is a joint venture between the Ceylon Petroleum Corporation and Indian IOC. It is in a development stage of 30 tanks at a time. Perhaps we will also look at a joint venture refinery. It is also on the table but it is still at a very initial stage. There is a lot of movement in that direction and we both can work together.”

He added that the Indian Government had offered to develop the Palali airport and the Lankan Government hoped to make a decision on that within the next three months.