FE Report

Business leaders of Sri Lanka and Bangladesh would participate in the increase of bilateral trade and the exploration of new investment opportunities to benefit consumers of the two SAARC countries utilizing existing regional and other agreements, such as SAFTA and APTA.

The outgoing Sri Lankan High Commissioner, Vadivel Krishnamoorthy made the comments while talking to a group of journalists recently.

He also reiterated his interest in striking Free Trade Agreements (FTA) between Bangladesh and Sri Lanka thatwill benefit both countries.

"We believe that a FTA between the two countries would certainly be extremely beneficial to the interests of both parties," he said.

Sri Lanka has sufficient experience in FTAs, having worked two successful agreements with India and Pakistan. Both agreements have shown positive developments towards improving trade between the respective countries. However, the proposed FTA between Bangladesh and Sri Lanka has still not seen light," he noted.

He believes that the FTA between Sri Lanka and Bangladesh will be advantageous to both countries in terms of the enhancement of trade and investment, and would open up more opportunities in banking, insurance and shipping. The Lankan diplomat also reinforced this idea by mentioning that when Sri Lanka signed a FTA with India in 2000, bilateral trade between the two countries increased in manifold during the past eight years.

On the issue of bilateral trade between the two SAARC countries, the outgoing Lankan diplomat expressed hope that since 2005-2006 the trade gap between the two countries has reduced substantially and is now leaning in favour of Bangladesh. It has been reported that Bangladesh exported to Sri Lanka goods amounting to approximately 13 million dollars, and that Sri Lanka exported to Bangladesh goods amounting to approximately USD 10.8 million. While pharmaceuticals exports to Sri Lanka are on the rise, the export of jute, yarn, twine, jute products, cast iron articles, furnace oil etc. are also exported to Sri Lanka from Bangladesh," he said.

Sri Lanka's exports to Bangladesh consist of textiles and textile articles, products of the chemical and allied industries, animal oil, vegetable oil, machinery and other mechanical appliances and equipment. With the commencement of direct air links and convenient travel arrangements between the two countries the High Commissioner added that he hoped that tourism would increase in the two countries.

On the topic of investment, he said that Sri Lankan investors have invested nearly 50 million dollars in Bangladesh, Mr Krishnamoorthy, a patron of the Sri Lanka Bangladesh Chamber of Commerce and Industry (SLBCCI), emphasized people-to-people contact, especially between business communities of both countries, to broaden economic engagement.

He said that "Our economic links are growing well. Bangladeshi and Sri Lankan entrepreneurs are increasingly engaging themselves in expanding bilateral commercial opportunities. Bangladesh is the fourth largest trading partner in Sri Lanka in the SAARC region, in terms of both exports and imports. He lamented that bilateral trade between the two countries still however remains at a very low level, and that the efforts of the chamber will help explore the possibility of increasing trade by introducing new products to each other's markets. He said that potential products that could be exported to Bangladesh are agricultural products, and confectioners, and manufacturing products such as free fabricated buildings, aluminum wire and yarn."

He also stated that chamber leaders of the both counties could help boost the growth of small and medium enterprises and urge small businesses to come up with innovative ideas, thereby boosting bilateral trade.

The export of pharmaceutical products to Sri Lanka is on the rise and is expected to reach over 100 million US dollars within a short period.

The Lankan diplomat expressed that Bangladesh should diversify its export basket to penetrate Sri Lanka's market, which has lowered its import tariff.

The Sri Lankan government is examining the possibility of introducing the direct air links between the two capitals.