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Prime Minister Modi Advocates India Sri Lanka Economic Partnership Agreement

By TN Ashok    Diplomatic Editor

Colombo, March 13: India today wanted Sri Lanka to move boldly to conclude a Comprehensive Economic Partnership Agreement as part of its policy to take advantage of the former’s opening up to the world.

“India has Free Trade Agreements (FTSs) with ASEAN countries and some others”, Indian Prime Minister Narendra Modi told a distinguished gathering of Sri Lankan and other businessmen during his address to the Ceylon Chamber of Commerce.

Modi said India did not want Sri Lanka to fall behind in the changing and competitive world. “That is why India and Sri Lanka should move boldly to conclude a Comprehensive Economic Partnership Agreement. You should also attract investments from India for exports to India.   That should be the natural outcome of our proximity and your strengths”, Modi said.  

Ravi Karunanayake, Minister of Finance of Sri Lanka, Rishad Bathiudeen, Minister of Industry and Commerce of Sri Lanka, Suresh Shah, Chairman of the Ceylon Chamber of Commerce,

Business representatives from India and Sri Lanka were among the distinguished gathering who heard Modi’s speech in rapt attention as he arrived here on a two day visit on the final leg of his three nation tour of the Indian Ocean countries Seychelles, Mauritius as part of building up the maritime security in the region.

Indian investments can also upgrade and expand your infrastructure. It is also natural that Indian investors are more likely to invest here because of familiarity and proximity. They are already here.  And, I know that there are many large commitments in the pipeline. They are looking for your support, Modi told the Sri Lankan businessmen.

Modi mentioned that the progress on Sampur Thermal Power Project and the Trincomalee Oil Farm as examples of fine economic cooperation between the two countries.    That is good for Sri Lanka’s energy security and for our partnership. I also believe that when we connect the lives of people, we strengthen the bonds between nations, he said.

Modi pointed out that India had extended visa on arrival facility to Sri Lanka from April 14. We should do more to connect our countries by air and sea. India and Sri Lanka were, in some ways, better connected in the past than we are now! In the past, a person could buy a rail ticket in Colombo and travel to Chennai by rail and ferry! Air India’s decision to launch direct flight between our capitals will help reverse that trend. Tourism unites people and creates economic opportunities, he said.

India is already the biggest source of tourists here, Modi pointed out saying “We will work together to increase that flow.  India’s progress gives us the ability to create opportunities for our neighbors. Our development partnership has injected commitments of 1.6 billion dollars in assistance from India.   That has helped rebuild and upgrade infrastructure in Sri Lanka.

Prime Minister Modi said India had offered today another Line of Credit  of US $ 318 million   for the railways sector and  pointed out that Reserve Bank of India has agreed  to provide Central Bank of Sri Lanka  a currency swap arrangement  for US $ 1.5 billion. “This will increase the stability of Sri Lankan Rupee. It is not just in development partnership.   We will also be supportive in advancing your commercial interests. I believe in Sri Lanka’s capabilities.   We should engage more.   We should open up to each other more. We should move forward with greater belief in our own strengths; more trust in each other; and, more confidence in the fruits of our partnership, he said.

Modi is of the strong belief that countries do better when the entire region moves together.  Barriers of boundaries inhibit progress;   international partnerships give it speed. “That is why, Modi said, we see a rising tide of regional integration and cooperation across the world. Our region is rich in resources.   We constitute a large market.   We complement each other.   Therefore, our cooperation can be of huge benefit to all of us.”

Modi pointed out that there were powerful examples in South Asia to show that differences in size was no constraint to beneficial partnerships. “If we use our strengths and seize our opportunities”, Modi felt benefits were enormous. Bhutan benefits from hydropower exports to India.  Nepal has significant manufacturing exports to India – in part driven by Indian investors.

Infrastructure, energy, supply chains, traditional handicrafts, modern manufacturing, tourism and services – there are no limits to our possibilities. There is new  purpose and clarity  in our policies;  a new vision for inclusive development;  new standards  in our governance;   and, a new level of energy  in our economy, Modi said referring to the transformational change taking place in India in the last nine months since the NDA led government took over.

Last quarter, India was the fastest growing global economy.   We are confident that we can grow even faster. The progress of one-sixth of humanity is a major economic opportunity for the world. The global confidence in India has been restored.   The world’s engagement with India is at a new level. But, the first claim on us should be that of India’s neighbors. 

India should be a catalyst   for economic growth in our own region. That is why I speak of a neighborhood where trade, investment, ideas and people move easily across the borders. India will do its part for the region, Modi said recalling his refrain in Kathmandu earlier.   

Modi said all the countries in the region should work together to integrate markets more.   “We will make trade smoother and possible through the most direct routes.   We will invest in regional connectivity.  And, we will share our capabilities in science and technology with South Asia, from advanced medicines to disaster management or space science.

India , as a friend and neighbor, attaches the highest importance to Sri Lanka’s economic progress.  Sri Lanka is a nation of many achievements and great strengths.   It has education, skills and enterprise. It has an excellent location. And, it has won peace now. 

Sri Lankan businesses have shown that they can compete with the best in the world.   Our garments and tea industry know that! 

Modi said India was pleased to be Sri Lanka’s largest trading partner and one of its largest sources of investment. Our Free Trade Agreement in 2000 was a pioneering initiative in the region.  It has given a big boost to our trade.   Sri Lanka’s exports to India have grown sixteen times – yes, sixteen times – since then.  This is impressive by any standards.

Modi referred to the concerns about the huge trade imbalance and said he was prepared to talk it out. India wants balanced growth in trade.  We will try to make it easier and smoother for you to access the Indian market.    That is part of my philosophy of ease of doing business in India. Our agreement on Customs cooperation is a step in that direction, he said. 

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