Non-tariff barriers still an issue, says Sri Lankan official

Friday, 2 March 2012 00:01 - - {{hitsCtrl.values.hits}}

Chennai : Sri Lanka’s Deputy High Commissioner in Chennai Vadivel Krishnamoorthy, demitted office on Wednesday after a two-and-a-half year stint. He is returning to Colombo as Director-General for South-East Asia.

Krishnamoorthy came in at a time when the war between Sri Lankan forces and the LTTE was raging. He had a difficult job of batting for Tamils — being a Tamil himself — even while projecting his Government’s views to people here.

This delicate balancing act won him many friends across the political spectrum.

In a conversation with Business Line, Krishnamoorthy expressed satisfaction at the growing economic engagement between India and Sri Lanka. However, he noted there were many ‘non tariff barriers’ (NTB) that prevented Sri Lankan businessmen from realising the full potential of the Free Trade Agreement between the two countries. On NTB, Somi Hazari, Chairman and Managing Director of the Chennai-based Shosova group and a former President of the Indo-Asean-Sri Lanka Chamber of Commerce, cites the example of tea: While the FTA allows import of Sri Lankan tea, the tea needs to be tested only at Kochi.

Also, India fixes a limit on quantity — 15 million kg. The growing economic engagement between the two countries is underpinned by strong trade and investment flows.

The two-way trade has zoomed from $500 million in 1999 to over $4 billion in 2011. India’s investments into Sri Lanka too are on the rise. The cumulative investment, which was $24 million in 2000, exceeded$600 million in 2011.

This has led to Bank of Ceylon showing interest in opening four more branches in India. The bank, which has had a branch in Chennai for the last 16 years, will soon apply to the Reserve Bank of India for approval, says Palitha Jinasoma, Country Manager, Bank of Ceylon.

Also, the island-nation’s carrier, SriLankan Airlines, wants to increase flights to India and will soon operate out of Madurai too. The airline’s CEO told this to the members of the Tamilnadu Chamber of Commerce and Industry during a recent visit to Madurai.

India is also involved in a big way in the post-war reconstruction in Sri Lanka. Some of the projects that India is involved include: Renovation of Palaly Airport and Kankesanthurai Harbour; construction of a Cultural Centre in Jaffna; interconnection of electricity grids between the two countries, construction of a 150-bed hospital at Dickoya; and setting up a coal power plant in Sampur as a joint venture between National Thermal Power Corporation and the Ceylon Electricity Board. (The Hindu Business Line)