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G D C Ekanayake

The document discusses Sri Lanka's economic integration with India through various trade agreements. It notes that total trade between Sri Lanka and India grew 33% in 2007 compared to 2006, and India has been Sri Lanka's largest importer since 2003. The benefits of integration with India for Sri Lanka include improved terms of trade over time, opportunities for trade diversification, access to India's larger market, and potential for increased foreign direct investment. Deeper economic integration could further develop in areas beyond trade in goods such as services, investment, and cooperation.

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Rajib Mukherjee
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62 views8 pages

G D C Ekanayake

The document discusses Sri Lanka's economic integration with India through various trade agreements. It notes that total trade between Sri Lanka and India grew 33% in 2007 compared to 2006, and India has been Sri Lanka's largest importer since 2003. The benefits of integration with India for Sri Lanka include improved terms of trade over time, opportunities for trade diversification, access to India's larger market, and potential for increased foreign direct investment. Deeper economic integration could further develop in areas beyond trade in goods such as services, investment, and cooperation.

Uploaded by

Rajib Mukherjee
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Indias Role in Asian Economic Integration Sri Lankas Perspective

Regional Integration
1. Asia Pacific Trade Agreement (Bangkok Agreement) 2. SAPTA 3. India (ISFTA) 4. Pakistan (PSFTA) 5. SAFTA

1975 1995 1998 2002 2007

Integration with India


Import/Export Ratio
1990 2000 2003 2006 1052 1034 446 369

Total trade between the two countries grew by 33% in 2007 compared to 2006 Items outside ISFTA are also imported under reduced tariff/duty free (particularly in the transport sector and refined petroleum products) India is the largest importer since 2003 however, exports performance has potential for further improvement

Benefits to Sri Lanka in Integration with India


Terms of Trade have improved for Sri Lankas over time Opportunities for trade diversification Comparative cost advantages of imports from India as against developed countries Access to a larger market Greater Potential for increase in FDI s Prospects for greater integration in the areas of trade in service, bilateral investment and economic cooperation under Comprehensive Economic Partnership Arrangement (CEPA) with India

Integration Prospects in Sri Lanka


Resilience of the economy recording over 6% growth in the past 3 years GSP + status of Sri Lanka to access EU markets Greater investment opportunities at comparatively lower costs (petroleum, power and transport sectors) Tourist destination for the emerging middle class Potential for further deepening of economic integration in areas other than trade in goods Strengthening regional security and stability and thereby harmony

Table 1 : Tariff Line Coverage under Preferential Schemes (2006)


Agreement ISFTA PSFTA SAFTA - Developing members - Least developed members APTA - Developing members - Least developed members No. of Tariff Lines % of Total Tariff Lines (6515)

4663 5337 5017 4855 162 536 464 72

71.6 81.9 77.0 74.5 2.5 8.2 7.1 1.1

Source : Department of Trade, Tariff and Investment Policy

Table 2 : Tariff Structure(2006)


Tariff Rate (%) Number of Tariff Lines % of total (6515)

0 2.5 6 15 28
Other (eg. Specific rates)

770 2122 475 1624 1432 91

11.8 32.6 7.3 24.9 22.0 1.4

Source : Department of Trade, Tariff and Investment Policy

THANK YOU

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