Economic relations between India and Sri Lanka have a long history dating back centuries. India, with a vibrant and growing economy, is Sri Lanka's biggest neighbour in the region. 'India is a very important market for Sri Lanka because it is our No. 1 trading partner, No. 1 generator in terms of tourism arrivals and among the top five foreign investors in Sri Lanka,' says Upekkha Samaratunga, Minister (Commercial), High Commission of Sri Lanka in India, as she shares more on the bilateral relationship between both countries in conversation with SERAPHINA D'SOUZA.
Tell us about the bilateral relationship between India and Sri Lanka, and the emphasis that Sri Lanka places on India as a trade partner.
Total trade between the two countries stood at US$ 5 billion in 2017. Of that, we have exported goods to the value of $689 million and India has supplied goods to the value of $4,498 million. We have also observed that bilateral trade has increased since the operationalisation of the India Sri Lanka Free Trade Agreement in March 2000. There is potential for further growth in our bilateral trade and Sri Lanka is now very focussed on this market. We expect greater market access for Sri Lankan products in the Indian market.
What is the current nature of the engagement between both countries, especially in the building, construction and infrastructure space?
The government generates the bulk of construction activities in Sri Lanka, especially in the infrastructure development segment. According to industry reports, by the year 2012, government sector contracts accounted for almost 94 per cent of the total value of contracts issued within the country. While private-sector involvements have clearly increased since then, the state is likely to remain the key player in the construction sector.
In Sri Lanka, we have over 2,500 registered local construction firms. The Construction Industry Development Authority (CIDA) has categorised these construction companies in Sri Lanka on a scale of 1 to 10 while taking into account the company's financial assets, technical capabilities and field-specific experience.
Government policy encourages private investment in several infrastructure projects such as water supply, wastewater disposal, power generation, roads, industrial estates, car parks, etc. The sector is being constantly innovative with services that set or match global trends such as green construction, soil and geo-technology, which have helped place it higher on the global construction map.
We require the collaboration of foreign investors to develop the construction industry and, therefore, encourage Indian companies to invest in construction and infrastructure development projects in Sri Lanka.
What are the opportunities in the aforementioned sectors in Sri Lanka for Indian companies to seize?
The Sri Lankan Government has prioritised infrastructure development as a national priority, considering its importance in attracting and facilitating foreign direct investment. The massive infrastructure development drive currently in progress is expected to support the country to achieve sustainable growth in the medium and long terms. Timely development of economic infrastructure will help increase economic efficiency while expanding the production capacity of the economy and facilitate productivity enhancement and reduction of regional disparity.
The economic infrastructure development programme undertaken by the government so far has focussed on all areas of infrastructure, which include: