Sri Lankan apparel to get wider access to Indian market

July 06, 2007 (LBO) – India has agreed to lift restrictions relating to fabric origins on duty free Sri Lankan apparel exports to the sub-continent market in the latest trade talks between the two neighbours, a senior official said. "Now apparel exporters to India can source their fabric requirements from anywhere," Manel de Silva, Director-General of Commerce of the Commerce Department, told LBO in an interview.

A draft memorandum of understanding on the deal was received by the Sri Lankan government last Friday.

The deal relates to three million pieces of clothing which till now had to have Indian fabric to qualify for duty free access to the huge Indian market under a Free Trade Agreement between the two countries.

De Silva says the Indian concession was aimed at giving the island a certain "comfort level" to show that the bigger neighbour was serious about opening up trade despite the problems that had cropped up in the free trade deal.

Both countries are holding talks on expanding their FTA and broadening it into a comprehensive economic partnership agreement that would include services.

They hope to wrap up a deal on a Comprehensive Economic Partnership Agreement (CEPA) by year's end. The CEPA will