India and Sri Lanka are to further expand cooperation in the petroleum sector to help overcome the present crisis in Sri Lanka.
The High Commissioner of Sri Lanka to India Milinda Moragoda met with the Minister of Petroleum & Natural Gas and Housing and Urban Affairs of India Shri Hardeep Singh Puri, today (10th March ) at the Ministry of Urban Affairs in New Delhi.
India has provided to Sri Lanka as envisaged under the four-pillars of cooperation, agreed during the visit of Sri Lankan Finance Minister Basil Rajapaksa to India in December last year.
in particular the USD 500 million line of credit has been approved to purchase petroleum products. Additional assistance too has been provided by India to enhance Sri Lanka’s petroleum stocks.
High Commissioner Milinda Moragoda also briefed Minister Puri on the challenges that Sri Lanka is currently facing as regards to the supply and distribution of petroleum products and their impact on the country’s energy sector.
The High Commissioner and the Minister discussed modalities through which India and Sri Lanka could further expand cooperation in the petroleum sector to help overcome the present crisis.
The discussion also focused on a range of issues pertaining to the energy sector, including ways and means through which Sri Lanka could establish long-term strategic ties in the petroleum, oil, gas and related logistics sectors.
Minister Hardeep Singh Puri was a distinguished career diplomat prior to joining politics. He had served at the High Commission of India in Colombo during the period 1984-1988.
India has traditionally been among Sri Lanka’s largest trade partners and Sri Lanka remains among the largest trade partners of India in the SAARC. In 2020, India was Sri Lanka’s 2nd largest trading partner with the bilateral merchandise trade amounting to about USD $ 3.6 billion.
Sri Lankan exports to India have increased substantially since 2000 when ISLFTA came into force and more than 60% of Sri Lanka’s total exports to India over the past few years have used the ISFTA benefits.
Interestingly, only about 5% of India’s total exports to Sri Lanka in the past few years have used the ISFTA provisions, thereby indicating their overall competitiveness in the Sri Lankan market.
In addition to being Sri Lanka’s largest trade partner, India is also one of the largest contributors to Foreign Direct Investment in Sri Lanka.
A number of leading companies from India have invested and established their presence in Sri Lanka. According to BoI, FDI from India amounted to about US$ 1.7 billion during the period 2005 to 2019.
The main investments from India are in the areas of petroleum retail, tourism & hotel, manufacturing, real estate, telecommunication, banking and financial services.
Similarly, investments by Sri Lankan companies in India are also surging and taking advantage of India’s dynamic economy and wider market.
Significant examples include Brandix (about USD 1 billion to set up a garment city in Visakhapatnam), MAS holdings, Damro, LTL Holdings, and other investments in the freight servicing and logistics sectors.
