The Hindu Business Line : India to look into Lanka's concerns over FTA

(From left) Mr K.G. Baalakrishnan, Chairman, India-Sri Lanka JBC; Mr Jeyaraj Fernandopulle, Sri Lankan Minister of Trade, Commerce and Consumer Affairs; and Mr E.V.K.S. Elangovan, Union Minister of State for Commerce and Industry, at the joint business council meeting in in Chennai on Friday. - Bijoy Ghosh

Chennai , Oct. 1

THE Indian Government will look into Sri Lanka's concerns over the impediments to the smooth operation of the Free Trade Agreement between the two countries, the Union Minister of State for Commerce and Industry, Mr E.V.K.S. Elangovan, said here on Friday.

The Minister said this at the eighth meeting of India-Sri Lanka Joint Business Council here, referring to the points raised by his Sri Lankan counterpart, Mr Jeyaraj Fernandopulle.

The Sri Lankan Trade Minister had reiterated his observations over the non-tariff barriers in India, including the imposition of an additional sales tax on some of the Sri Lankan products by the Tamil Nadu Government.

Mr Fernandopulle said that while considerable increase in the volume of two-way trade between India and Sri Lanka had taken place after the FTA came into force in 2000, businessmen on either side were yet to realise the full benefits of the agreement.

"A close review of the composition of our exports (to India) reveals that Sri Lanka lacks much-needed diversity in its trade with India," Mr Fernandopulle said, observing that only a few intermediate goods such as copper and copper products "still continue to dominate our exports under the FTA."

"This heavy dependence on a few products has raised serious concerns among the policy makers in Sri Lanka, particularly when our private sector can enjoy duty-free access to as many as 4,150 tariff lines (products) under the FTA with India," the Minister said.

In a recent interview to Business Line, Mr Fernandopulle had mentioned these and had said that there was also a problem of corruption at the Indian customs. Referring to the news report, Mr Elangovan said, "Certain issues like corruption in public life are very broad issues. Of course, the Government of India is taking a number of steps to weed out corruption."

Later, speaking to newspersons, Mr Elangovan said that the issue of sales tax on imported goods would be taken up with the Tamil Nadu Government. When pointed out that the issue had been there for over two years, he said, "We have been made aware of it only now."