India and Sri Lanka are widening the scope for free trade agreement they already have by including services and investments. Economic ties between the two countries will be boosted by liberalising trade norms.
The free trade agreement was arrived at in 2000. India has a healthy trade surplus in goods with Sri Lanka. India exported goods worth $4.5 billion in 2017-18 and its imports were $773 million. Sri Lanka is India’s major trading partner in South Asia.
Sri Lanka is a garment making hub. A scenario where Sri Lanka sources from India and manufactures apparel and garments for the rest of the world could lead to a win-win situation for both countries. Both countries share a rich textile tradition. Large Indian companies can encourage Sri Lankan companies to be part of their supply and value chains.
Sri Lanka has been urged to make use of fully-funded training opportunities in India under the Indian Technical and Economic Cooperation program, in which a number of slots is earmarked for textile related subjects.
Sri Lanka is one of India’s largest trading partners in SAARC. India in turn is one of Sri Lanka’s largest trade partners globally. Sri Lanka is among the top ten countries which import cotton fabrics from India.