The Sri Lanka- India CEO’s Forum organised
by the Ceylon Chamber of Commerce (CCC) and Federation of Indian
Chambers of Commerce and Industry (FICCI) was held on August 4, 2012
with the participation of a large number of CEOs from both Sri Lanka and
India. The Co-Chairs for the event were Mr. Kulatunga Rajapakse,
Managing Director of DSI Samson Group (Pvt) Ltd. from Sri Lanka and Mr.
Sunil Bharti Mittal, Chairman & Managing Director of Bharti Airtel Ltd.
from India. The Forum was conceptualised at a meeting between H.E. the
Prime Minister of India Dr. Manmohan Singh and H.E. the President of Sri
Lanka Mahinda Rajapaksa.
The trade ties between Sri Lanka and India
go back over 2500 years. India is fast becoming a global super power.
The business community in India is the driving force behind this growth.
Sri Lanka can reap benefits from the Indian growth story. Given the
small size of the Sri Lankan market, it is important that Sri Lanka
access the Indian market to increase its export and economic growth.
The trade balance between India and Sri
Lanka at present is heavily in favour of India. Ways and means have to
be identified to reduce this imbalance. The two Governments envisage
doubling of trade between the two countries within the next three years.
Sri Lanka would like to see obstacles to trade and investment removed to
enable Sri Lankan businesses to penetrate into the Indian market. There
are opportunities and partnerships to be forged for the mutual benefit
of both the countries.
Some of the potential sectors identified
for increasing trade and investment between the two countries are
apparel, rubber products, power and energy, tourism, education, skill
development, ports and shipping and infrastructure in general.
In the apparel sector, with China becoming
more expensive apparel sourcing destination, it was felt that there is
immense opportunity for India and Sri Lanka to increase their market
share in the world. Further there is scope for Sri Lanka to increase
export of apparel to India with further relaxation of the rules of
origin and quota for apparel that is currently in place under the ISFTA.
There is high demand for rubber based
components in India and at present companies in India face high prices
and shortages. Hence an area for both countries to explore the
possibility of forging joint ventures in rubber product sector to supply
rubber components to India.
The CEOs also discussed the potential of
cross promotion of tourism between the two countries. It was also
highlighted that air connectivity is crucial to promote tourism.
Providing higher frequency of operation to Indian airlines to Sri Lanka
will help improve air connectivity between the two countries. In
addition to that there is potential to invest in hotels. Interest was
expressed by Indian CEOs to invest in mid-segment of hotels in Sri Lanka
as opposed to luxury hotels. It was pointed out that further
streamlining of investment procedures will help attract more
investments. For example a suggestion was made to establish a land bank
identifying land available for hotel construction in tourism zones.
Given that an additional 35,000 hotel rooms are expected to be
constructed in Sri Lanka in the next few years, there will be high
demand for manpower in the tourism sector. This provides an opportunity
for India to invest in hotels in Sri Lanka.
Given the rapidly growing demand for
electricity in India, there is potential for Sri Lanka to export power
to India during the off peak hours and vice versa and for Indians to
invest in power generation in Sri Lanka. Sri Lanka has a potential in
excess of 40,000 MW of wind energy. To encourage investments in to wind
power generation, it was pointed out that the wind resources
availability in Sri Lanka should be identified and land earmarked for
wind power projects. It would also make sense to expedite the
implementation of undersea transmission linkages so that surplus power
can be exported to India and this will help in bridging the trade
deficit between the two countries. The necessity to have a policy and
regulatory framework that enables big power projects to be done by
private sector was also highlighted. Further it was stated that Sri
Lankans can invest in power generation in India and 100 percent foreign
equity participation is allowed.
Sri Lanka currently faces shortage of
skills in a number of sectors. Therefore it was agreed that
internationally recognised Indian education institutes should be
encouraged to set up branches in Sri Lanka. To encourage investments
into the higher education sector in Sri Lanka, it is important to fast
track setting up the right regulatory framework to facilitate such
Further it was agreed that Colombo Port is
crucial for India for its transshipment. Indian CEOs stated that the
regulatory framework in Sri Lanka is more efficient than in India and
the bureaucracy is more manageable compared to India. Therefore India
should maximise benefits from the geographical locational advantage of
Sri Lanka to access the rest of the world.
The CEOs of both the countries mphasized
the importance of having a flexible visa regime between the two
countries. It was specially pointed out that Sri Lanka should facilitate
multiple entry visa for businesses from India without hassle and from
Indian side the minimum salary requirement of India of US$ 25,000 needs
to be relaxed for Sri Lanka.
The Commerce Ministers of both countries and the Senior Minister of
Monetary Cooperation of Sri Lanka graced the occasion and agreed to
support the initiatives that will be taken by the CEOs. The two
Governments have already decided to establish a Joint Task Force to come
up with a road map to further enhance economic cooperation between the