Exports to India swell by 160% to Rs. 16 b

FINANCIAL TIMES
Exports to India swell by 160% to Rs. 16 b

http://archives.dailymirror.lk/2003/02/28/ft/1.html

Though commanding an insignificant market share experts reiterate vast scope for growth as a total of 4,150 items would enjoy duty free access
By Nisthar Cassim
In what experts described as an encouraging breakthrough Sri Lanka's exports to the giant and Non-Tariff Barriers laden India had swelled by 160% to Rs. 16 billion last year from Rs. 6.2 billion in 2001.

Commerce and Consumer Affairs Minister Ravi Karunanayake yesterday described the jump in exports to India as "impressive" and expressed confidence at a top seminar on the Indo Lanka Free Trade (ILFTA) organized by the National Chamber of Commerce that the exports would grow further.

He said that specific exports under the ILFTA had grown by 342% to $ 46.6 million or Rs. 4.4 billion up to August 2002 compared with US$ 16 million or Rs. 1.4 billion in the entirety of 2001. The rise in 2002 over 2001 was unprecedented as the growth in previous years have been lower. In 1995 exports to India was only Rs. 1.6 billion while in 1999 it was Rs. 3.3 billion and Rs. 4.2 billion in 2000.

The release of impressive performance came few days ahead (March 31) of the three full years of implementation of ILFTA and at a time when Premier Ranil Wickremesinghe is touring India. He is expected to lobby for greater market access or minimum non tariff barriers for Lankan products as well as woo Indian investments as part of strong bilateral economic cooperation. \The ILFTA was signed by President Chandrika Kumaratunga and Premier Atal Bihari Vajpayee in December 28, 1999.

Though the spurt in exports is encouraging, Sri Lanka's share of India's imports is insignificant or around 0.1% while exports to India out of Sri Lanka's total is only 3.6% in 2002, reflecting vast scope for massive growth. As per the FTA, a further 2,799 items would enjoy zero duty concessions in addition to 1,351 items that were allowed duty free from March 2000.

Sri Lanka's imports from India had also increased by 48% to Rs. 79.8 billion in 2002 and India continues to be Sri Lanka's major source for imports. Minister Karunanayake stressed that India should not be perceived as a giant trying to swamp the tiny Sri Lanka or no should Indians perceive that a dynamic Sri Lanka is looming as a threat to India. "Instead both countries must explore ways to work together and take on the world," he added.

Spurred by growth dynamics of Sri Lanka's exports to India, the Minister said that the task at hand is not to harp on ILFTA implementation related issues any longer but to exert concerted efforts by all to find ways from the FTA in a sustained manner.

"This does not mean that we are completely ignoring the remaining few implementation related issues. While keeping the few issues in the back of our minds and resolving to take necessary steps to sort them, I reiterate that our main focus should be on how to maximize benefits. Such a focus is in full compliance with the economic policy objectives of the Government under the leadership of Premier Ranil Wickremesinghe," Minister Karunanayake said.

In the seminar he detailed various achievements made during the first Joint Minister Committee Meeting held in June 2002. “We have already taken action to resolve various bottlenecks and erosion of concessions and competitiveness due to the imposition of sales tax on items enjoying zero duty,” the Minister said. “We are awaiting a response from India on these issues,” he added.

“A concept paper on FTA 2 and beyond has been prepared by Ministry which is under consideration now to identify modalities of closer partnership between the two countries,” Minister Karunanayake said.

Acting Director of Commerce Ms. Manel de Silva maintained that the FTA has been beneficial to Sri Lanka both in terms of diversifying export product base to India and attracting investments from India and other countries keen to enter Indian market through Sri Lanka.

She said that during the past three years a host of issues have been resolved but urged the private sector to update the Department of any further or future problems. She said that the Department and the Ministry was busy preparing papers for the next round of the Joint Ministerial meeting in June. Two leading exporters to India Ceylon Biscuits and Mayfair Lanka Ltd., expressed their problems and achievements.

World's first Delifrance Cafe on Wheels in Colombo
Delifrance, the France-based worldwide restaurant chain, on Wednesday opened its first ever mobile cafe at Nawam Mawatha. This Rs. 9 million venture is operated by Crescat Restaurants and serves up and middle market clientele.

Crescats Joint Managing Director Nick Clayton who opened the restaurant said that this is an experiment in developing a network in Sri Lanka and it was Delifrance's first mobile facility. Delifrance has over 500 outlets worldwide and 100 in Asia.

Delifrance Manager Niroshan de Silva said that this mobile restaurant will operate in the vicinity of Nawam Mawatha serving executives of the corporate sector in particular. "This location was chosen to cater to the corporate market in the area which did not have a cafe that is able to fulfil their needs for high quality but easy dining," he added.

Future plans include introduction of three more mobile restaurants in Colombo and suburbs. Manned by four employees Delifrance serves high quality Eastern and Western cuisine with range of drinks from fruit juices to soft liquor such as beer and wine. Having set up its first cafe at Crescat shopping mall in 2000 Delifrance's other outlet is at Odel.

January tea exports down
In addition to a dip in crop, the tea industry had another blow with exports in January 2003 being lower both in terms of quantity and value over the corresponding month of last year.

Asia Siyaka Commodities said that tea exports in January 2003 dropped to 21.1 MnKg the lowest in nine months and it was also 9% lower than the 23.2 exported during January 2002. Value of exports dropped to Rs. 4.7 billion as against Rs. 5.1 billion. The drop has been mostly to markets in the Middle East particularly the UAE (Dubai) a key regional distribution centre. Exports to UAE, which averaged 2.6 MnKg during the past three months slumped 42% to 1.5 million kilos in January.


Govt., World Bank set stage for North East Fund
An exchange of letters between the Government and the World Bank took place on Wednesday providing the framework to establish a fund known as the" North-East Reconstruction Fund" (NERF).

The NERF will support activities of the Sub-Committee for Immediate Humanitarian and Reconstruction Needs of the North and East (SIHRN). The World Bank was selected as the custodian for the NERF during the fourth meeting of peace talks in Nakorn Pathom, Thailand in January 2003. The exchange of letters is a prelude to the custodian arrangement to be negotiated between the World Bank and SIHRN.

The NERF will receive grant assistance from donor countries to support immediate humanitarian and rehabilitation needs of the North and East. The Fund will have several funding-windows making it flexible to attract donor contributions.

The donor countries pledged commitments to the tune of US$ 70 million at the Oslo Donor Conference in November 2002. The custodian will employ an internationally recognised monitoring agency to physically monitor project implementation, while the accounts of the fund will be audited by an internationally reputed auditing firm with a view to maximising transparency and accountability