India has also sought easier visa norms to further facilitate entry of professionals from here.
The 14th round of talks between senior officials of India and Sri Lanka was concluded recently in Colombo. Issues which came up for the talks included rules of origin, goods, services, and technical barriers for trade. On the other hand, Sri Lanka has sought removal of a quota on apparel exports to India. The island nation is also asking for duty concessions on tea and certain agricultural commodities.
As elections are announced in Sri Lanka, the next round of negotiations between the two countries will be held after that. The two nations have already implemented a free trade agreement in goods and now they are negotiating to expand the pact by including more goods and services.
The India-Sri Lanka Free Trade Agreement (ISFTA) came into force in March 2000. It enhanced economic relations between the two countries by reducing tariffs on a wide range of goods. Since the original ISFTA focused solely on goods, both countries have been negotiating for several years to expand it into a Comprehensive Economic Partnership Agreement (CEPA), which would include services, investment, and other areas of economic cooperation.
Under the current FTA, India allowed limited imports of garments from Sri Lanka at a 50 per cent tariff (or customs duty) concession for up to 8 million pieces annually, with a requirement that 6 million of these pieces use Indian fabric. Additionally, India offered a 50 per cent tariff concession on up to 15 million kg of tea from Sri Lanka each year.
Think tank Global Trade Research Initiative (GTRI) said that Sri Lanka may be seeking removal of the quota on garments, especially considering that India has allowed duty-free imports of garments from Bangladesh under the South Asia Free Trade Agreement (SAFTA) for Least Developed Countries (LDCs).
