India Highlights Investment Plans For Sri Lanka
By Dinouk Colombage
In a strong boost to current levels of Indo-Sri Lanka bilateral cooperation, India has unleashed a considerable investment quantum that could be summarized as an entirely new thrust on its bilateral outreach on Sri Lanka.
Two manufacturing zones one of which has vocational training support, a top bilateral Joint Task Force for economic promotion, $5 billion in a massive new round of investments, bigger involvement in Sri Lanka’s on-going oil and gas explorations, and direct linking to Sri Lanka’s five hub strategy are some of the major initiatives by India in Sri Lanka’s new economic upswing.
Indian Minister, Anand Sharma along with Commerce Secretary S. R. Rao and top officials of the Indian Department of Commerce met with Minister of Industry and Commerce Rishad Bathiudeen on Friday prior to the commencement of the bilateral trade discussions.
According to Sharma Sri Lanka and India have had a history of bilateral trade, and as such will continue to promote economic relations between the two countries. “We agreed to set up a Manufacturing Special Economic Zone (MSEZ) near Trincomalee with Indian support for investments linked manufacturing and exports of auto components and engineering goods. An industrial skills training institute will also be established to assist the MSEZ”, he said.
He explained that India had decided on developing the zone in Trincomalee on the basis of the suggestion made by Economic Minister Basil Rajapaksa.
“US $ 5 billion of investments by our corporate sector are also in the pipeline for Sri Lanka in various sectors. We are also keen to see cross investments from Sri Lanka as well. Already Sri Lankan firms such as Brandix and John Keels have arrived in India”, he explained.
In return the Indian firms pushing the US$ 5 billion investments to Sri Lanka are Indian Oil Corporation, the fourth largest FMCG Company in India Dabur Ltd, the largest marketer of sugar and ethanol in India Renuka Sugar, the real estate and property collaboration of Indian magnates ‘South City Projects (Kolkata) Ltd’, Tata Housing Development Co and ITC Ltd.
Sharma also said, “We wish to create institutional linkages with Sri Lanka on its five strategic hubs concept; the knowledge hub, commercial hub, naval & maritime hub, aviation hub, and the energy hub.” He added that India was looking to share their knowledge and experience with Sri Lanka to assist institutional building in the country within these themes.
He also said that India was keenly interested in expanding their presence in the on-going oil and natural gas exploration that is taking place off the east coast of Sri Lanka. Bathiudeen expressed the government’s appreciation for the numerous investment projects the Indians were planning on pursuing. He also drew attention to the fact that in 2011 India’s exports to Sri Lanka experienced an annual growth of over 70% (from $ 2.5 million Dollar to 4,350 million Dollars) while Sri Lanka’s exports to India has registered an annual growth of only 16.8% ( from 466 million Dollar to 521 million Dollars). This has created a US $3,828 million balance of trade in favour of India.