Remarks by Consul General of India in Jaffna at the Inauguration of 5th Jaffna International Trade Fair on 17 January 2014
It gives me great pleasure to participate at the inauguration of the 5th Jaffna International Trade Fair in which, India has the distinction of being the Partner country for the fifth consecutive time. It is an indication of high priority attached to Sri Lanka by India in furthering trade and economic relations between the two countries. I am sure the Sri Lankan economy has benefitted by the large presence of Indian companies in Sri Lanka.
India and Sri Lanka enjoy a vibrant and growing economic and commercial partnership, with both trade and investment expanding greatly in recent years. Since the operationalization of the India – Sri Lanka Free Trade Agreement (FTA) in 2000, trade alone has multiplied by as much as 8 times, crossing the milestone of US$ 5 billion in 2011-12. The FTA has thus proved to be a real engine of growth for bilateral commercial interaction.
In 2011-12, India’s imports from Sri Lanka went up by almost 45% to cross US$ 720 million, making Sri Lanka the largest source of merchandise from the South Asian region for India. This is a big jump from US$ 45 million imports in 2000-01, when Sri Lanka occupied the 4th rank as an import source for India in the region. There is no doubt that the FTA brought significant benefits to both sides.
Due to overall global trade being sluggish owing to several macro-economic factors, keeping that trend that there has been slowing down in the two way India-Sri Lanka trade in the last two years. As against global two way trade of US $ 30 billion with Sri Lanka in 2011, the overall trade has come down to US$24.5 billion in 2013. I am confident as the world economy picks up, India Sri Lanka trade also will continue to grow.
Top Indian companies continue to display great interest in Sri Lanka, investing in the country across sectors such as infrastructure, manufacturing, services, and construction. The cumulative FDI approvals for Indian investments stand about US$ 1 billion since 2003, with investment inflows of US$160 million in 2012. Nearly US$ 2 billion worth of FDI has been committed by Indian companies for the next five years or so. The investment flow is by no means one-sided as Sri Lankan companies too are finding opportunities in the large Indian markets, leveraging FTA provisions.
In fact, bilateral economic cooperation today extends across multiple areas of engagement, including trade in goods and services, tourism, infrastructure, education, science and technology, and agriculture. Air connectivity has gone up manifold and there are about 120 flights a week between Colombo and other destinations in India; almost one-fifth of tourist arrivals in Sri Lanka is from India. The beneficial synergy in bilateral economic relations is best illustrated by the container traffic of Colombo Port, which handles over thirty percent of container trans shipment business of India; India-linked cargo, in turn, accounts for over three-fourths of the Port’s total container trans shipment volume.
As far as Northern Province is concerned, I would like to highlight here that trade has been only one facet of the economic and bilateral relation that India has with Sri Lanka and another and what I consider a more important facet of its relation with Sri Lanka is the Development Partnership projects that India has been proud to be associated with Sri Lanka.
In the last four years India has contributed significantly in the various sectors which has a direct bearing on the livelihood of its people and economy of Sri Lanka. To quantify the project assistance, the total assistance provided in Housing sector, Education sector – construction/repairs of schools, setting up of language labs, Health sector - provision of medical equipments and construction of hospitals, Livelihood sector - reconstruction of fishnet factory, Industrialization sector - reconstruction and revival of the Atchuvely Industrial estate, operationalising the KKS Port, etc., works out to over SLR 18 billion rupees.
As on 31 December 2013, 10,250 houses have been completed in Northern and Eastern Provinces. On the Railway front, the railway line between Omanthai and Killinochchi was inaugurated in September 2013 and the link upto Palai is in the completion stage and expected to be inaugurated shortly. By April 2014, the railway link would eventually reach Jaffna. India has helped in rehabilitating Kankesanthurai Port by removing wrecks/sunken ships and dredging under Indian grant assistance. Efforts to complete the infrastructure around the Atchuvely Industrial Zone to encourage the entrepreneurs of Northern Province to set up their units at the Industrial estate will be completed by end January 2014. India has also helped the North Sea Fishnet Factory to revive its operation with expanded capacity. India has also assisted Small businesses in Mullaitivu and Killinochchi districts to revive their business activities which were damaged or destroyed during the period of hostilities.
Two more important links which could improve people-to-people contacts as well as in turn substantially improve trade and economic relations are direct air link between India and Jaffna and Ferry service between Talaimannar and Rameswaram. We look forward to these two happening at an early date which will give a great boost to economic development of Northern Sri Lanka.
While events such as the International Fair are important to showcase the various strengths of the country, efforts such as those I mentioned earlier have a far greater reach to the common people and encourage in developing better relationship with each other.
India will continue to be a trusted partner with Sri Lanka in the years ahead and I am sure the existing relations will further get strengthened.
I wish the participants and the organisers of this fair all the best for success of the fair and for their continued support to bring Jaffna in the international map of trade events.
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