The Hindu Business Line : Our exports face non-tariff barriers in India, says Lankan Minister

EXPORTS from Sri Lanka are being subjected to non-tariff barriers (NTBs) in India, which goes against the spirit of the Free Trade Agreement between the two countries, Mr Jeyaraj Fernandopulle, Minister of Trade, Commerce and Consumer Affairs, Government of Sri Lanka, said on Wednesday.

Speaking to The Hindu group of publications here, Mr Fernandopulle observed that some States, for instance, Tamil Nadu, imposed a higher sales tax on goods from Sri Lanka. Other NTBs include permission to land goods only at few designated ports in India and so many "questions at the Customs that the exporters are fed up."

"Our people complain about a lot of corruption here. People are not happy with that. Unless this is sorted out, business won't run smoothly. The Central Government should look into this," Mr Fernandopulle said.

He added that it was similarly proving to be difficult for Sri Lankan businessmen to set up businesses in India, with a plethora of permissions to be obtained from the RBI and the Government. However, the Minister said that overall, the Indo-Sri Lankan Free Trade Agreement was operating well, despite a few irritants. High-level discussions were going on for removing the irritants, he noted.

He said that there were many enquiries from businessmen in western countries for setting shop in Sri Lanka, so that they could take advantage of the FTA and sell goods into India. Sri Lanka is being seen as a gateway to India, he said.

The Minister said that Sri Lanka was in favour of extending the multi-fibre agreement, due to expire this December, by another two years. If the quota system (under the agreement) were done away with, China, India and Pakistan would gain a market share at the expense of countries such as Sri Lanka, Mr Fernandopulle observed. When this happens, "some 50,000 people in Sri Lanka would lose their jobs." However, a two-year reprieve would help Sri Lanka as the government would by then have finalised an FTA with the US.

Answering a question on peace with the LTTE, Mr Fernandopulle said that the Sri Lankan government was ready to continue the talks. He felt that the LTTE only wanted an Interim Self-Governing Authority (ISGA), which will give them full control over their areas for an interim period.

"Then they will go on with the interim arrangement without talking further for a final solution," Mr Fernandopulle said, adding that he feared that a lot of aid money flowing into LTTE-controlled province would go into the pockets of the militants.