Sri Lanka is preparing to deepen its trade ties with India by exploring an expansion of the existing Free Trade Agreement (FTA) between the two nations, with the government signalling this as a key economic priority going forward.
Cabinet Committee Already in Place
A committee of officials has already been appointed by the Cabinet of Ministers to pursue the initiative, underscoring the seriousness with which the government is approaching the proposal. The move reflects a renewed push to unlock greater economic benefits from Sri Lanka's relationship with its closest and largest neighbour.
Budget Announcement Sets the Tone
The plan was unveiled by President Anura Kumara Dissanayake during the presentation of the 2027 Budget in Parliament. The announcement positioned an expanded FTA with India as part of the administration's broader economic strategy aimed at strengthening Sri Lanka's trade competitiveness and attracting greater investment flows.
Building on an Existing Foundation
Sri Lanka and India have maintained a bilateral Free Trade Agreement for over two decades. While the existing pact has facilitated trade between the two countries, critics have long argued that Sri Lanka has not fully capitalised on the arrangement. An expanded agreement could potentially cover a wider range of goods, services, and investment provisions.
For Sri Lanka, which is still navigating its recovery from a devastating economic crisis, deeper trade integration with India represents a significant opportunity to boost export revenues, create employment, and stabilise the broader economy.
The appointment of a dedicated Cabinet committee signals that this is not merely an aspirational goal, but a structured policy objective with government machinery already in motion.
Further details on the scope and timeline of the proposed expansion are expected to emerge as the appointed committee begins its deliberations.
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India will swallow our industries. happened before, why we trying again?
exactly. our garment sector alone cant compete with their scale.