Indo Lanka Chamber of Commerce and Industry to step up bilateral trade

By Shanuka Tissera

The fourth AGM, Indo Lanka Chamber of Commerce and Industry (ILCCI) held on Friday was a success as both parties, who act on behalf of the two respective countries are trying to further trade agreements amidst a global recession.

President of ILCCI who was re-elected for the third year running – Vish Govindasamy shared that there has already been a very long lasting relationship between Sri Lanka and India and we must now start to capitalise on it. “The ball is in our court and it is up to us to act quickly. With the demise of the European Union in a foreseeable future, according to the zero sum game theory, once the E.U begins shedding, then countries like India and Sri Lanka can reap the benefits. Tourism, tea, garments and education are just a few sectors that can benefit if the right systems are in place.”

Even though Sri Lanka’s political relations with India are mainly centred around the Southern State of India and have encountered many difficult times, economic relations between the two countries have continued to expand impressively. India is Sri Lanka’s largest trading partner and India is the number one source for imports accounting for 19% of Sri Lanka’s total imports. It is also the third largest export destination for Sri Lankan products absorbing six percent of total exports. Indian visitors even formulate the largest single group having a share of over 20 percent of total arrivals. In March 2012, India and Sri Lanka were keen to resume talks on the Indo – Sri Lanka Free Trade Agreement and the proposed Comprehensive Economic Partnership Agreement (CEPA). According to numerous sources at the ILCCI, the Free Trade Agreement has been an unrivalled success; CEPA on the hand has not been as well implemented.

India is also heavily involved in the post-war reconstruction in Sri Lanka. Renovation of the Pallaly Airport and Kankesanthurai Harbor, construction of a Cultural Centre in Jaffna, construction of a 150 bed hospital in Dickoya and setting up a coal power plant in Sampur, as a joint venture between the National Thermal Power Corporation and the Ceylon Electricity Board.

These are just some of the projects that India is currently enrolled in and will continue to invest as long as high levels of efficiency are met.  Chief Guest Ashok K. Kantha – High Commissioner for India also noted how well the FTA has worked. “CEPA on the other hand, must be led by Sri Lanka, by the time you develop a consensus, it is instrumentally unnecessary. India has signed many trade agreements with countries such as China and Japan but the real golden partnership is between Sri Lanka and India.”

The Chief Guest then announced that one major challenge facing us all today is a threat of protectionism.  When one is under pressure, innately one attempts to look for the most protection. “Any policy substitutions are not feasible if you are sitting in a fortress.”

Overall, the 4th AGM brought up important issues for discussion. The time is now for acting because once the house of cards collapse, it is going to be every country for herself and whom she trusts. Another possible solution that could increase trade heavily is through a power line connecting India to Sri Lanka.

This will even produce a safety cushion for investments into renewable energy and reduce the dependence on fossil fuels. Just as a key is always smaller than the door, Sri Lanka and India trading towards optimal efficiency could bring about benefits far greater than others expect.