Trade Glitch
May 02 (LBO) – A tariff cut of up to 70 percent on imports from India under the Indo-Lanka Free Trade Agreement has been pushed back due to legislative delays.
The tariff changes are currently in Parliament and there has been a delay in getting it approved but it is purely a procedural delay, Lal de Mel, Chairman of Sri Lanka™s Tariff and Trade Cluster told LBO on Tuesday.
Sri Lanka’s bilateral trade agreements with both India and Pakistan allow for a phasing out of tariffs over an eight year period, for goods that are not on a sensitive list.
Under the Indo-Lanka trade deal, Sri Lanka had to cut tariffs on about 2000 products to not less than 70 percent of the general customs duty rate by March 31 this year.
That means, for imports of finished goods from India, tariffs will drop from 28 percent to 8.
40 percent and from 2.5 percent to 0.75 percent for industrial raw materials and machinery.
Parliament is yet to approve the tariff revision for it to take effect, with the Department of Commerce expecting a delay of about a month.
About 17 percent of Sri Lanka’s total imports are from India to the tune of 1.
4 billion dollars.