India, Sri Lanka look to boost economic ties.

NEW DELHI: India and Sri Lanka, after years of delay following ex-President Mahinda Rajapaksa's intransigence, have finally launched negotiations this week on Economic and Technical Cooperation Agreement (ETCA) formerly known as CEPA or Comprehensive Economic Partnership Agreement that will push both Indian investments and services into the island nation.

Indo-Lanka ETCA that promises Indian investments in Lanka besides boosting service sector hopes to be in place by year-end despite strong opposition from Rajapaksa supporters.

A four-member Indian team led by a commerce ministry official was in Colombo this week for the first round of negotiations with their Lankan counterparts, an official source said.

As this was the very first meeting, the two sides explored the broad contours of the ETCA in terms of areas it should cover and avoid.

The two sides also apprised each other of their needs and concerns in the light of the changing economic situation and the experience accruing from the India-Sri Lanka Free Trade Agreement (ISLFTA) which has been in existence since 2000.

While India is looking at the ETCA as a mechanism to enable it to participate in the post-war economic development of Sri Lanka through Indian investments in select areas, the Sri Lankan government is seeking to use ETCA to become part of the Indian supply chain for the manufacturing sector, indicated a person familiar with the discussions.

The Sri Lankan Ministry of Strategic Development and International Trade had issued a statement recently which said that the ETCA will enable Indian manufacturers to set up factories in Sri Lanka and export to third countries with which Colombo plans to have Free Trade Agreements. India plans to send professionals for the IT sector and ship building, where there is a need for expertise and higher levels of training there. These are also sectors that could boost Sri Lanka's exports.

Source : economictimes.indiatimes.com