Introduction
India is Sri Lanka’s third-largest export destination while India is the primary origination of imports of Sri Lanka. As well as Sri Lanka is the second-largest trading partner of India in the SAARC region (‘International Trade Statistics of Sri Lanka - 2015’, 2015). Therefore, they entered ISFTA in 1998, and it is operated from the year 2000. From 2003 they have discussed comprehensive economic partnership agreement(CEPA) time to time. In the CEPA they discussed regarding four fillers including trade in goods, trade in services, investment and economic cooperation. After appointed of the new government in 2015, they again started to discuss an agreement called Indo Sri Lanka Economic and Technology Cooperation Agreement(ETCA). The important thing is no one of two government has published the real deal of ETCA. But some organizations have drafted the content of the agreement, and the Sri Lankan government is still failed to reject that written framework agreement.
According to the drafted framework agreement published by government medical officers’ association, the agreement includes trade in goods, trade in services, investments, economic corporation, technology corporation, and other provisions.
Objectives of ETCA agreement
a) To strengthen and advance the economic, trade, investment and technology cooperation between two parties
b) To promote further liberalization of trade in goods, liberalizing trade in services between the two parties and gradually establish fair, transparent and facilitative trading, investment and investment protection mechanisms.
c) To expand areas of economic cooperation and create a corporation mechanism
Source: (GMOA, 2017)
Trade-in goods
Under the ETCA agreement, they have proposed further, step by step eliminating tariff and non-tariff barriers to trade in goods between two countries. To that, they suggested an early harvest program to be implemented before executing the agreement. Both parties are considering to modify the negative list, MRP and quota under the Indo Sri Lanka free trade agreement. And also, thy consultations about rules of origin, Customer procedures, non-tariff, and trade remedy measures. According to the goods that can be subjected to tariff concession, they have categorized into three as goods subjects to immediate tariff elimination, goods subjects to phased tariff reduction, and exceptions (GMOA, 2017).
Trade-in services
According to the drafted framework agreement published by (GMOA, 2017), Sri Lanka offer seven types of services to India while India offers sixteen kinds of services to Sri Lanka. As per the GATS (General Agreement on Trade in Services) agreement all the types of trade-in facilities including cross border supply (Mode 1), consumption abroad (Mode 2), commercial presence (Mode 3), Movement of natural persons (Mode 4) involved here.
Sri Lanka’s offer list
1. Computer Related Services
Computer-related services include database management services, Networking, Software, and hardware installation, Data processing, and software implementation services.
2. Other Business Services
Under the other business services Sri Lanka offer convention services to India
3. Telecommunication Services
This is one of the primary growth sectors in India. In 2015 the telecom sector contributed 6.5% of GDP. The amount was INR 9 lakh crore. Bharti Airtel and Sunil Mittal are the major service providers in India.
4. Financial Services
India financial service sector contributes around 6.65% of the GVA of India. Under that Sri Lanka offers banking services insurance services and leasing services to India.
5. Health and Social Services
Indian health sector includes hospitals, medical devices equipment, and supplies, medical infrastructure, pharmaceuticals, diagnostics. The health sector contributed 4.2% of GDP in India, and the value was USD 78.6 Bn. The hospital provides 71% of the income of the health sector. Since Sri Lanka has a stablishing market for this sector.
6. Tourism and Travel Related Services
Tourism and Travel is the third-largest foreign exchange earning industry and one of the fast-growing industry in India. Tourism and Travel sector contributed USD 136.3 bn to the GDP in 2015
7. Transport Services
Here Sri Lanka has the opportunity to invest in road transport, water transports, air transport in India. Road transport is the primary transport sector of India,
India’s Offer List
1. Professional services
2. Computer Related Services
3. Research and development services
4. Real Estate Services
5. Rental Leasing services
6. Other Business Services
7. Telecommunication Services
8. Audio Visual Services
9. Construction and Related Engineering Services
10. Distribution Services
11. Educational Services
12. Environmental Services
13. Health and Social Services
14. Tourism and Travel Related Services
15. Recreational, Cultural and Sporting Services
16. Transport Services
Investments
Under this chapter of ETCA framework agreement, Sri Lanka and India have agreed to conduct consultation on the matters of investments within six months after the entry into the contract. Also, such agreement shall include,
a) Establishing an investment protection mechanism
b) Increasing transparency on investment-related regulation
c) Gradually reducing restrictions on mutual investments between the two Parties
d) Promoting investment facilitation
Economic Cooperation
The two parties come to the agreement to strengthen and enhance economic corporation between them based on equality and mutual benefit. And also explore new areas of and develop appropriate measures for closer commercial operation as a means to greater economic integration between the two countries and support and augment economic cooperation following developmental needs of each other and the welfare of their respective people (GMOA, 2017). Under the commercial agreement, they expect to cover intellectual rights protection and cooperation, financial cooperation, trade promotion and facilitation, customs cooperation, e-commerce cooperation and the significant areas of industrial and SME collaboration and strengthen the relationship between trade bodies of two countries.
Technology corporation
According to the drafted framework agreement published by government medical officer’s association in their web site in that framework agreement under the technology cooperation chapter no any terms conditions or discussions or suggestions mentioned. The reason is regulatory controls regarding technology cooperation is not in the place in Sri Lanka.
