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India is Sri Lanka’s largest trading partner&largest source of imports. India-Sri Lanka bilateral trade stood at US$ 5 billion in 2015 with Indian exports to Sri Lanka amounting to US$ 4.35 billion and Sri Lankan exports to India amounting to US$ 650 million. India ranks high as a trading partner of Sri Lanka both in terms of imports and exports. In 2015,Indiaaccounts more than 20 per cent of Sri Lankan imports and more than 6 per cent of Sri Lankan exports. These achievements were mainly due to the India-Sri Lanka FTA that has now been in operation for 15 years. The India-Sri Lanka FTA had some spillover benefits for both countries. First, the investment between both countries have increased during the last decade. The Indian cumulative investment in Sri Lanka is close to US$ 1 billion while Sri Lankan cumulative investment in India is close to US$ 300 million.Secondly, the services trade between the two countries has been growing over the last decade. For example, India is the largest tourist supplier to Sri Lanka while Sri Lanka is the fourth largest tourist supplier to India. It is to build on these positive achievements that the Economic and Technology Cooperation Agreement (ETCA) was suggested by both Prime Ministers of India and Sri Lanka when they met in Delhi in September 2015. ETCA is intended to be drawn economic benefits in following aspects. First, it will have a Chapter on an Early Harvest for trade in goods. The current Indo – Sri Lanka FTA on goods has yielded some benefits, particularly as in any given year 65% - 80% of Sri Lanka’s exports enter the Indian market on a preferential basis, while only 20% - 30% of Indian exports enter the Sri Lankan domestic market under the FTA. Despite this, some Sri Lankan exporters have experienced a number of Non-Tariff Barriers (NTBs), which have curtailed their capacity to penetrate the Indian market. The government is, therefore, attaching very high priority to an Early Harvest Program, which addresses these barriers. This Early Harvest is designed to enable Sri Lankan enterprises to benefit from the proposed ETCA early and boost confidence in the negotiating process. Secondly, the ETCA will exclude Mode 4 (Movement of Natural Persons). The government will contemplate opening up any segment of domestic professional services only at the request of the business sector concerned and in full consultation with all relevant stakeholders.

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Minister of Development Strategies and International Trade Malik Samarawickrama underscored Sri Lanka's interest to further strengthen economic relations with Korea,at a meeting with the Korean Deputy Prime Minister and Minister of Strategy and Finance Yoo ll-ho on Tuesday 20 September in Seoul. The Minister strongly welcomedmore Korean investment in Sri Lanka's growing economy, taking advantage of the island nation's strategic location in the Indian Ocean with access to markets and value chains in the Indian sub-continent, Europe, the Middle East and Africa. The Minister also apprised the Korean Deputy Prime Minister of the economic policy of the Sri Lankan Government, fiscal and other reforms being undertaken, FTAs under negotiation, and the setting up of industrial zones to attract foreign direct investment. Deputy Prime Minister Yoo welcomed these measures and expressed the Korean Government's strong interest to enhance economic cooperation with Sri Lanka. Acknowledging that the Korea-Sri Lanka economic partnership has greater potential than currently reflected, Deputy Prime Minister Yoo supported measures that would create more opportunities for Korean entrepreneurs to engage in Sri Lanka.

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A panel discussion in progress at the Ceylon Chamber’s Investment and Business Conclave 2016: From left: International Trade and Development Strategies Minister Malik Samarawickrama, Finance Minister Ravi Karunanayake, Public Enterprise
Development Minister Kabir Hashim and Senior Advisor to International Trade Minister Dr. Indrajit Coomaraswamy

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Minister of Development Strategies and International Trade Malik Samarawickrama led Sri Lanka delegation to the 12th US-Sri Lanka Trade and Investment Framework Agreement (TIFA) Council Meeting in Washington which adopted a path breaking Action Plan to boost bilateral trade and investment. The Council meeting was Co-chaired by United States Trade Representative Michael Froman and Minister of Development Strategies and International Trade Malik Samarawickrama. United States Permanent Representative to the United Nations Ambassador Samantha Power participated as well, encouraging the Sri Lankan government to continue its vital progress on democracy, accountability, and human rights. Ambassador Froman noted that the election outcome has ushered in a new era of U.S.-Sri Lanka economic cooperation.  Joint Statement issued at conclusion of the meeting is attached.

US Trade Representative Ambassador Michael Froman in his opening remarks stated that “it is our first significant opportunity for engagement on trade and investment issues since the Sri Lankan presidential election last year.” 

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In t e r n a t i o n a l Tr a d e an d Development Strategies Minister Malik Samarawickrama yesterday expressed confidence in Sri Lanka’s relationship with China continuing on a much firmer and stronger footing with the prevailing issues being successfully ironed out. “We discussed all the outstanding issues and all of them have been resolved.

Now it is all about systems as far as China is concerned,” said Samarawickrama during the Ceylon Chamber’s Investment and Business Conclave 2016, giving an update on his recent visit to that country.

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