Indian biz renews CEPA call

Wednesday, 12 February 2014 00:16 - - {{hitsCtrl.values.hits}}

Confederation of Indian Industry says confident CEPA will be as successful as Indo-Lanka FTA
Points to similar fears before FTA was inked in 1998
Trade will continue to surge irrespective; Indian business is very excited about investing in Sri Lanka: CII Director

Dharisha Bastians reporting from New Delhi India’s largest industry chamber yesterday strongly backed the inking of a Comprehensive Economic Partnership Agreement (CEPA) with Sri Lanka, saying the move would boost investment even as trade between the two nations has surged in the past decade. “Sri Lanka has shown reluctance,” said the Confederation of Indian Industry (CII) South Asia Director and Head South and Central Asia, Manish Mohan. A landmark Indo-Lanka Free Trade Agreement faced similar resistance before it was signed in 1998, boosting trading volumes between the two countries from $ 685 million in 2000-2001 to $ 5 billion in 2011-2012, CII officials said. “Today Sri Lanka is India’s biggest trading partner in South Asia and the FTA has been favourable to Sri Lanka,” Mohan told a delegation of journalists from Colombo in New Delhi yesterday. He added that while trade balance favoured India at the moment, the CII was looking at ways to even this out. However Mohan emphasised: “With or without CEPA, trade will go on. Things are moving. John Keells Holdings, Damro and MAS Holdings are engaged in India. But CEPA will boost investment.” The CII Director believes that a lack of awareness was a major roadblock to signing CEPA. CII is conducting sensitising and awareness building programs with every trade delegation from Sri Lanka, he said. The Chamber believes that food processing is a major area of potential for Sri Lankan companies to penetrate the Indian market with several Sri Lankan firms like Dilmah already making inroads. “Indian business is very excited about investing in Sri Lanka,” Mohan added saying the Indian chamber realised there needed to be more. He pointed to Indian companies like ITC, Bajaj, TATA and Krrish development as being proof of this interest. “The India-Sri Lanka economic relationship is a success story in Asia,” the CII Director maintained. CII’s latest push for CEPA is after waning interest from Sri Lanka. The Sri Lankan Government has backed away from CEPA with several key UPFA allies strongly opposed to the move. Last year Economic Development Minister Basil Rajapaksa hinted that the agreement was no longer necessary. In July last year the Hindu newspaper quoted Rajapaksa as saying the Sri Lankan business community felt it did not need CEPA as they had found good markets. In any case, he said, India did not make things easy for Sri Lanka, as, on the one hand, while it seemed like India was opening up its market, there were new barriers (non-tariff), on the other. Though CEPA has been in the works since 2005, several attempts to arrive at a consensus only proved futile. Negotiations began after a joint study group set up to explore ways of expanding bilateral trade relations and means for greater flow of investment between the two countries made its recommendations in 2003. Even after 13 rounds of negotiations until 2008, both countries could not come to an agreement. Hinting at CEPA now being perceived as irrelevant, Rajapaksa said, politicians and diplomats were clinging on to CEPA only for the sake of “its image”. All the same, trade relations between India and Sri Lanka, the minister said, were “very good” at present, with bilateral trade “rapidly increasing”. Last trade talks between India and Sri Lanka held in June 2013 did not touch on CEPA despite India earlier on having made it clear that it is essential to move forward on that front if trade is to be doubled between the two countries. The Indian delegation had emphasised the need for targeted Indian investment with a view to assisting Sri Lanka widen its export base and enabling integration into regional supply chains, including in the automobile parts, light engineering and pharmaceutical sector. The Sri Lankan side had emphasised the importance of bringing in more investments in the form of joint venture projects to encourage the Sri Lankan private sector and State enterprises to work together, like in the case of the sugar refinery in Hambantota, which will replace imports as well as expand exports.

Indian chamber to advocate visa scheme extension for Lankans

The Confederation of Indian Industry, the country’s biggest chamber of industry will take up the omission of Sri Lanka from the list of 180 countries India recently announced would be granted visa on arrival. Acknowledging that the omission of Sri Lanka dampened business interest from Colombo, CII Director Manish Mohan said the Chamber would take the issue up with the Indian Ministry of External Affairs and Ministry of Commerce. Mohan said CII had success before with getting certain regulations that were hindering Sri Lankan business relaxed after discussions with the Indian Government. “We understand that the visa difficulties are a problem. But many Sri Lankan business people are increasingly using the SAARC visa exemption scheme for quick access into India,” he said. (DB)