The Hindu Business Line : Move to cut trade imbalance with Lanka, Bangladesh

New Delhi, Oct. 8 The recent MoU signed by India and Sri Lanka to permit the latter to export three million apparel articles to India in a calendar year duty-free under the India-Sri Lanka Free Trade Agreement is basically aimed at providing “improved market access” for products from Sri Lanka into India.

It will also address the existing trade imbalance in bilateral merchandise trade.

Official sources told Business Line here that this additional flexibility of three million apparel articles duty-free and without any conditionality of sourcing of fabrics or port restrictions to Sri Lanka would not upset domestic apparel manufacturers as India is a big market and a growing one too.

They said that as a big country India is concerned about giving the right signals to neighbouring countries which are also members of the South Asian Association for Regional Cooperation (SAARC).

They said whereas India exported goods worth $1,610.37 million to Sri Lanka during the first three quarters (April to December) of 2006-07, it imported from Sri Lanka goods worth only $355.35 million.

The sources noted that in the case of Sri Lanka, it was stated by the Sri Lankan officials that it currently imports $2 billion of fabrics from the world, but the share of Indian imports is almost negligible.

As such, Sri Lanka sought Indian textile industry to export more fabrics to Sri Lanka which would be beneficial for Indian manufacturers in the long run.

MoU with Bangladesh

They further said that India also signed a MoU with Bangladesh on September 16 in Dhaka allowing that country to export eight million apparel articles in one calendar year duty-free and without conditionality of sourcing of fabrics or port restrictions.

This was also designed to address the growing trade imbalance against Bangladesh.

They said that during April-December 2006, India exported goods worth $1,193.56 million to Bangladesh but imported from that country goods worth $184.48 million.

They said that in both the cases, the Revenue Department would shortly issue the requisite notification to give effect to import of these apparel articles from both Bangladesh and Sri Lanka.

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