By: Staff Writer
January 02, Colombo (LNW): The recently signed Sri Lanka-Thailand Free Trade Agreement (FTA) promises significant opportunities to enhance business relations between the two nations.
At the Annual General Meeting of the Sri Lanka-Thailand Business Council, Thai Ambassador Paitoon Mahapannaporn emphasized the need for Sri Lanka to diversify its exports and increase investment to maximize the FTA’s benefits.
Delivering the keynote address on “Opportunities in Business Interactions between Thailand and Sri Lanka,” Ambassador Mahapannaporn underscored Sri Lanka’s strategic role as a trade hub.
He reiterated his commitment to fostering stronger economic and cultural ties, noting the historical connection between the two countries, rooted in shared religious and cultural heritage.
The FTA, signed in February 2024, aims to eliminate tariffs on 85% of products traded between the two countries over six years.
This agreement is projected to increase bilateral trade volume to over $300 million by 2025. However, challenges remain, as some goods will face phased duty reductions over extended timelines of up to 16 years.
For example, apparel, one of Sri Lanka’s key exports, will not immediately enjoy duty-free access.To overcome these barriers, Ambassador Mahapannaporn stressed the importance of diversifying Sri Lanka’s export base.
The country could benefit by producing high-quality products that meet Thailand’s demand for items like electrical machinery, equipment, and parts.
Additionally, strengthening global value chains and attracting export-oriented investments will be crucial. By reducing business costs and enhancing trade facilitation, Sri Lanka can position itself as a competitive trading partner.
From an investment perspective, Thailand offers a business-friendly environment, advanced infrastructure, and attractive incentive packages for various industries, including manufacturing and services.
Key sectors identified for mutual collaboration include clean technology, agro-processing, smart electronics, automotive manufacturing, medical and wellness, digital industries, and creative sectors.
Thai businesses are encouraged to explore opportunities in Sri Lanka, particularly in areas such as food processing, textiles, automotive components, and electronics.
Currently, Sri Lankan investments in Thailand span sectors like medical gloves, activated carbon, and logistics, while Thai investments in Sri Lanka include textiles, cement, food, and hospitality. Post-FTA,
Sri Lankan investors could explore manufacturing opportunities in Thailand, particularly in rubber, textiles, and locomotives. Conversely, Thai investors may consider entering Sri Lanka’s fruit and food processing, dental and pharmaceutical equipment, and electronics sectors.
To further strengthen bilateral economic ties, the Royal Thai Embassy, along with the Thai Chamber of Commerce and Ceylon Chamber of Commerce, is organizing a collaborative event in February 2025 titled “Business Opportunities between Thailand and Sri Lanka: Food, Agriculture, and Health for Sustainable Prosperity and Well-being.”
The event will include consultative meetings, study visits, and business matchmaking in food, agriculture, and health sectors. These activities aim to encourage joint ventures, business networking, and advisory collaborations. Ambassador Mahapannaporn expressed optimism about the future, emphasizing the vast potential for both countries to deepen their economic partnership. By leveraging the FTA and fostering cooperation in high-growth sectors, Sri Lanka and Thailand can achieve sustainable prosperity and well-being.
