Sri Lanka Needs To Appoint Chief Negotiator to Bridge Trust Gap & Propel India Trade Pact
New Delhi: As US reciprocal tariffs begin to impact nations globally, Sri Lanka finds itself needing to initiate fresh trade negotiations with India. According to a new report, the Sri Lankan government must also consider appointing a Chief Negotiator to address any existing trust deficit between the two countries.
Sri Lanka is currently at a critical juncture, with its economic prospects for 2026 clouded by external shocks. Economic growth is forecasted to slow to 3.3 percent following the United States’ imposition of a 20 percent tariff on key Sri Lankan exports, the article in Eurasia Review highlights.
In response to these challenges, Sri Lanka has requested India to expand its export quota under the Indo-Lanka Free Trade Agreement (ISFTA), which was signed 25 years ago. Meanwhile, India has continually advised Colombo to update the existing free trade agreement to better address foreseeable issues.
“At this stage, the Economic and Technology Cooperation Agreement (ETCA) has become a key topic of discussion,” the report by A. Jathindra, a Sri Lankan-based independent political analyst, notes. However, progress on improving the India-Sri Lanka Free Trade Agreement (ISFTA) has stalled despite numerous rounds of talks under various governments aimed at expanding trade and investment with India.
India remains interested in moving forward. Santhos Jha, India’s High Commissioner to Sri Lanka, stated that India is not pushing ETCA but is “waiting for Sri Lanka to wake up and realise it is indeed beneficial.”
From the Sri Lankan side, Deputy Minister of Foreign Affairs Arun Hemachandra said, “If we can secure favourable terms, we are open to the agreement. If not, we will not sign it. We are committed to safeguarding the nation’s economic sovereignty.”
He further emphasized caution, noting, “When there is one stronger nation and one weaker nation, we ought to understand that there is a propensity for the stronger nation to dominate the weaker nation. Therefore, we must proceed with caution.”
The report concludes that the key challenge for Colombo is how to strategically manage relationships with stronger nations in a way that serves its own national interests.
*Disclaimer: This story is from the syndicated feed. Nothing has changed except the headline.*
https://www.freepressjournal.in/business/sri-lanka-needs-to-appoint-chief-negotiator-to-bridge-trust-gap-propel-india-trade-pact
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