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Srilanka Relation Wid India

Srilanka Relation Wid India

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Published by bhoopendrat

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Published by: bhoopendrat on Apr 01, 2010
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Brief on India-Sri Lanka Relations
India is Sri Lanka's closest and historically the most important neighbour. The two counare separated physically by the Palk Straits, amongst the narrowest waterways separaany two countries. The two Governments have built upon a legacy of historic links, comculture, shared commitment to democracy and a general orientation towards non-alignin foreign policy. India aims to maintain close, cordial and cooperative relations withLanka at both popular and government levels. As a close neighbour to which bothSinhala and Tamil communities trace their roots, internal developments in Sri Lanka hamajor bearing on India's policy towards that country, which consists of a commitment tounity, sovereignty and territorial integrity of Sri Lanka and to the restoration of lasting pethrough a peaceful, negotiated settlement that meets the just aspirations of all elementSri Lankan society.Political
2. The institutional framework for the relationship is provided by frequent conat the highest political level. President Mahinda Rajapaksa made his first visit abroaIndia after his victory at the November 2005 elections from December 27-30, 2005. PMinister Shri Atal Bihari Vajpayee visited Colombo from July 28-31, 1998 to attend theSAARC Summit and had bilateral meetings on the sidelines with President ChandBandaranaike Kumaratunga and Leader of Opposition Ranil Wickremesinghe. A JCommission was established in 1990 and is chaired by the Minister for External Affairshis Sri Lankan counterpart. Its 6th meeting took place in Colombo on June 10, 2005. Theregular contact at the official level including annual Foreign Office Consultations at the lof Foreign Secretary (the last such meeting was held in Colombo on May 2, 2005), regCommerce Secretary level talks (last held in New Delhi in January 2006), talks betwCustoms authorities, fisheries officials, the Navy/Coast Guards and a Joint BusiCouncil.3. The juridical framework for the relationship is provided by a Free Trade Agree(singed in 1998 with entry into force in 2000), a Double Taxation Avoidance AgreemeBilateral Investment Protection and Promotion Agreement, and bilateral agreements/Mon Air Services, Cooperation in Small Scale Industries, Cooperation in Tourism, IT, SpEducation and Agriculture. Work on augmenting the institutional and juridical framewobeing undertaken through negotiations to craft a Comprehensive Economic Partner Agreement (CEPA) and a MoU on Fisheries. An MoU on Small Development Projectsbeen signed to give a new direction to bilateral development cooperation.4. Sri Lanka has supported through a statement at the UN General Assembly Incandidature to the permanent membership of the UN Security Council.5. India was the first country to respond to Sri Lanka's request for assistance after 
tsunami on 26 December 2004. Teams of naval and army officers, ships and aircraft provia continuous µbridge' of assistance in fields such as search and rescue, provisioessential items, repair of damaged infrastructure, health, clearing of harbourspsychological counseling and reached into affected areas in the North, East and the SoThe Prime Minister has announced a grant of Indian Rupees 100 crores for tsunami relrehabilitation projects in Sri Lanka. Health, transport infrastructure, livelihood activityexchange of µsoft skills' on disaster management are the focus of Indian assistancpost-tsunami reconstruction.6. Today while not being directly involved in the peace process, India consults closelythe Government of Sri Lanka, the facilitators (Norway) and different strands of democopinion in Sri Lanka, including on Sri Lanka's efforts to build a national consensusnegotiated solution within a united Sri Lanka and on the basis of maximum devolution. Istands ready to share with Sri Lanka her own experience of unity in diversity, pldemocracy and devolution. India is also one with Sri Lanka in rejecting war and conflictin opposing terrorism, which constitutes the biggest threat to democratic societies todayEconomic and Development Cooperation
7. Since the entry into force of the FTA in M2000, trade has grown rapidly. Bilateral trade exceeded US $ 1.7 billion in 2004 and rosUS $ 2.025 b in 2005. Exports from India to Sri Lanka in 2004 amounted to US$ 1350 millwhile exports from Sri Lanka to India in the same year amounted to US$ 382 million. Tfigures were US $ 1.437 b and US $ 588 m respectively in 2005. The FTA prompted a 25increase in bilateral trade between 2001 and 2004. At 15% of the total, India is the bigsource of Sri Lankan imports. It is also the 3rd largest destination for Sri Lankan expWith FDI approvals of US $ 450 million, India is the 4th largest investor in Sri Lanka. InOil Corporation, Taj Hotels, Apollo Hospitals, L & T, Ambujas, Tatas and Ashok Leylandamong the prominent Indian companies operating in Sri Lanka. Connectivity betweentwo countries is at an all time high with approximately 100 flights per week, includinIndian private airlines, to and from 10 destinations in India.
8. India is active in a nuof areas of development activity in Sri Lanka. About one-sixth of the total developcredit granted by Government of India is made available to Sri Lanka. At present two linecredit are operational. These are a US $ 100 million line for capital goods, consudurables, consultancy services and food items and a US $ 31 million line of credit for suof 300,000 tonnes of wheat. A US $ 150 million line of credit for purchase of petrolproducts is operational as of March 2005. Another one of US $ 100 million, earlier slatedrural infrastructure projects including a road between Anuradhapura and Trincomalee tnamed the Rajiv Gandhi Amity Highway, is now being made available for post-tsurehabilitation of the coastal railway line. Besides ITEC scholarships (70 slots annually),of Colombo Plan (50 slots) and BIMSTEC (30 slots), India also contributes to the Ce
Workers Education Trust that aims at the educational development of the children of esworkers. A new scheme of Mahatama Gandhi scholarships has just been inaugurateenable meritorious Sri Lankans to pursue their studies in Sri Lanka. A number of projare also implemented under Aid to Sri Lanka funds. Important projects under considerainclude a 150 bed general hospital at Hatton in the Central Province and a US $ 7.5 milCancer Centre in Colombo. A special area of focus is the North and the East. Indiacommitted to develop a Master Plan for the development of Trincomalee.9. Next steps in the FTA process While the Free Trade Agreement has worked well; thescope for significant improvement. Currently the Agreement covers only goods; there alarge number of items in the negative lists (429 items in case of India, 1180 items in casSri Lanka as well as quantitative caps on tea and textiles) and implementation of Agreement has thrown up another set of issues. The two sides are jointly addressing tpractical difficulties arising out of the implementation of the FTA. Work is simultaneounderway to move to the next step of economic integration by expeditingComprehensive Economic Partnership Agreement (CEPA) between the two countrieJoint Study Group on the subject set up in October 2003 has given its reportrecommended an enhanced policy framework for trade in goods building uponexperience of the FTA and also including trade in services and measures to enhance flof investment by addressing regulatory and operational constraints. Commerce Secrelevel talks in Colombo in August 2004 broadly discussed the scope of CEPA as well asof the JSG report as a reference document for possible approaches and negotiationfollow-up round in New Delhi on February 10-11, 2005 resulted in the setting up of a TNegotiating Committee and its sub-groups which have since met in New Delhi and Colowith a view to finalizing the Agreement by end-2006.10. Cooperation in the energy sector India and Sri Lanka have decided to set up a 500coal-based thermal plant at Trincomalee through a joint venture between the CeElectricity Board (CEB) and NTPC. In the hydrocarbons sector, Lanka Indian Oil Corporanow operates 170 petrol pumps in Sri Lanka and has successfully raised money througIPO to fund expansion of its activities, including the setting up a lubes plant in TrincomaONGC is examining the possibility of exploration for oil and gas in Sri Lankan water team visited Sri Lanka and held discussions with Sri Lankan authorities on possexploration in the Ramnad-Mannar sector. During his visit in May 2006, Foreign MiniMangala Samaraweera offered one block to ONGC on a preferential basis.11. Connectivity Projects to enhance connectivity, including through the constructionland bridge over the Palk Straits and ferry services between Colombo and Kochi/Tutichave also received the attention of the two governments. Ideas such as developin

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