India-Sri Lanka Economic And Trade Engagement

INDIA-SRI LANKA ECONOMIC AND TRADE ENGAGEMENT

OVERVIEW

India and Sri Lanka enjoy a vibrant and growing economic and commercial partnership, with bilateral trade growing rapidly in the last decade and a number of leading Indian private sector companies investing in Sri Lanka and establishing a presence in this country. Sri Lanka is India's one of the largest trade partners in SAARC. India is Sri Lanka's largest trade partner globally. Much of the impetus for the current level of our economic interaction stemmed from the signing and entry into force of the Free Trade Agreement (FTA) in 1998 and 2000 respectively.

Bilateral trade between India and Sri Lanka amounted to USD $ 4.93 billion in 2018. In addition to being Sri Lanka’s largest trade partner, India is also one of the largest contributors to Foreign Direct Investment in Sri Lanka. Sri Lankan exports to India have increased substantially during past 18 years since 2000 when ISLFTA came into force. Interestingly, over 80% of Indian exports to Sri Lanka are outside the list of products covered by the FTA, thereby indicating their overall competitiveness in the Sri Lankan market.

The main investments from India are in the areas of petroleum retail, tourism & hotel, manufacturing, real estate, telecommunication, banking and financial services.

Investments by Sri Lankan companies in India are also surging taking advantage of India’s dynamic economy and wider market. Significant examples include Brandix (about USD 1 billion to set up a garment city in Visakhapatnam), MAS holdings, Damro, LTL Holdings, apart from other investments in the freight servicing and logistics sector.

Apart from the growth in trade and investment, India continued to be the largest source market tourists coming to Sri Lanka. The total number of tourist arrivals from India to Sri Lanka during January-December 2018 was 424,887 i.e. approximately 18.2% of the total tourist arrival into Sri Lanka. Sri Lankan tourists too are among the top ten sources for the Indian tourism market. In 2018, more than 120925 tourist visas were issued by the High Commission of India in Colombo to facilitate travel between India and Sri Lanka, along with 15390 Business Visas.

To enhance connectivity between the two nations India and Sri Lanka entered into an Open Sky Agreement enabling Sri Lankan Airline to operate unlimited number of flights to six Indian metro airports. Sri Lankan airline is also the largest foreign carrier in India operating over 100 flights per week to 14 destinations in India.

BILATERAL AGREEMENTS

BILATERAL TRADE

INVESTMENTS

Concessional Financing Projects in Sri Lanka

Grant Projects

Buyer’s Credit Projects

OTHER ECONOMIC ENGAGEMENTS