Indo-Lanka fast-track starts in earnest, first officials’ team arriving in eight days

A bilateral Joint Task Force (JTF)/committee for economic promotion announced by India in Colombo on 3 August has been further expanded, within a mere 24 hours of its initial announcement.

India also announced that a special delegation will be arriving in town by 14 August with regard to the pharma hub, one among the two new export zones to be set up in Sri Lanka by India.

“We commend the prompt action taken by the Indian side to fast track trade boost. We also thank India for its support to revive our textile and handloom sector,” said Minister of Industry and Commerce Rishad Bathiudeen on 4 August.

Minister Rishad was responding to the latest developments unveiled by visiting Indian Minister of Commerce, Industry and Textiles Anand Sharma on 4 August in Colombo.

On 3 August, Minister Sharma announced in Colombo that a bilateral Joint Task Force (JTF) would be set up by the two governments to expand economic cooperation. The JTF will give recommendations to the two Governments within a stipulated period of 90 days.

India also agreed to establish a pharmaceutical manufacturing hub in Sri Lanka with the participation of Indian pharma firms as well as a special Manufacturing Export Zone for automotive components and engineering goods. The JTF is mandated on both zones.

No investment values are finalised yet on the two manufacturing hubs, especially given the nature of the Manufacturing Special Economic Zone (MSEZ) near Trincomalee which has vocational training as well, but Minister Sharma said the investment envisaged was fairly big.

“On 3 August evening, as per the proposal made by Minister of Economic Development Basil Rajapaksa to me, recognising that I am also the Indian Textiles Minister, I have added a new component to the Joint Task Force envisaged – it is the textile component – to engage India’s textile industry with the Sri Lankan textile industry and revive the industry in Sri Lanka by upgrading and modernisation. We will send an Indian textile industry delegation which will be in Sri Lanka in the first half of September,” announced Sharma.

Minister Sharma revealed this during his address to the India-Sri Lanka CEOs Forum held on the same day in Colombo. The one-day forum was set up to develop a road map for increased cooperation and mutually-beneficial economic partnership between the two countries and saw participation of top business leaders from India and Sri Lanka.

“Another delegation on the proposed pharmaceutical hub will be coming to Sri Lanka from coming 14-16 August, in just 10 days. This proposal was only made yesterday and we have now taken the decisions. My thinking and approach has been that I do not believe in only making statements but follow them through with prompt actions. These steps that we have taken will not only help us towards $ 10 b target and double our trade by 2015, but it should be more than that, because the engagement in trade and investment are well below the potential,” Minister Sharma added.

Minister Bathiudeen, under the guidance of Economic Development Minister Basil Rajapaksa, had already set up a new Handloom Taskforce to revive the looms and textile sector. A huge positive impact is now expected on Minister Bathiudeen’s TF through the Indian initiative.

Lankan handlooms, in addition to the domestic market, are absorbed by Italy, Maldives, Germany, France, United Kingdom, Thailand, Netherlands and Norway. According to the Exports Development Board (EDB) under the Ministry of Industry and Commerce, the handloom exports valued $ 0.90 m in 2009 rose in 2010 to $ 1.5 m and in January-October 2011, stood at $ 1.17 m. EDB expects the handloom exports to hit $ 2.24 m in 2015.

The tradition of Lankan handloom weaving has been brought down from generation to generation and Sri Lankan weavers succeeded in creating a distinct identity of their own by transforming the traditional woven patterns and colour schemes into the beautiful textile designs.

The Ministry of Industry and Commerce itself estimates the Ceylon Handlooms sector to be around $ 13 m, annually. However, strong demand and limited supply has pushed Ceylon Handloom output to the premium grade-both in the domestic and international markets.