India-Sri Lanka trade agreement delayed
A trade pact between India and Sri Lanka has hit the skids this week over political concerns, Live Mint reported Monday.
The neighboring countries were due to sign a landmark pact Aug. 1. Called the Comprehensive Economic Partnership Agreement, it would open trade even further than a free trade agreement signed a decade ago. Bilateral trade between the two countries has increased nearly six-fold, to $3.2 billion in 2007.
“The India-Sri Lanka Cepa was to be the first bilateral agreement of its kind in South Asia,” the report said. “The new pact would give Sri Lanka much greater access to the Indian market, opens up the services sector in both countries and enhances Indian investment in Sri Lanka.”
The signing of the deal is thought to be more vital to Sri Lanka, a small island nation at the southern tip of India that relies heavily on exports due to its relatively small consumption market. But politically, the deal isn’t an easy sell. The party in power in Sri Lanka is seen as nationalist and avoids having ties that are too close to New Delhi, even when there are trade gains to be made.
The trade pact hasn’t fallen through altogether — it’s taken three years of negotiating to reach this point — but it seems certain that the deal won’t be signed Aug. 1 as expected.
India-Sri Lanka trade agreement delayed
