Chennai port open to Lankan tea, garments

By Bandula Sirimanna

India has agreed to lift restrictions on concessionary Sri Lankan tea and apparel exports at the Chennai port.

This agreement was reached during two days of technical level negotiations on the Comprehensive Economic Partnership Agreement (CEPA) that concluded in Colombo on Thursday.

The opening of the Chennai port for the export of concessionary Sri Lankan tea to India is a cost-cutting measure, owing to its close proximity to Sri Lanka. Sri Lankan tea exports will definitely increase as exporters will be able to ship tea to Chennai reducing freight costs, a senior Export Development and International Trade Ministry official told The Sunday Times FT.

Indian authorities had earlier allowed entry only through Mumbai port for tea and garment exports to India since 2002 after the Free Trade Agreement (FTA) came into effect, but they had been limited due to heavy freight costs.

CEPA negotiations in Colombo were led by the Indian Ministry of Commerce Joint Secretary Rajeev Kher and Sri Lanka’s Department of Commerce Director General Manel de Silva. Another decision was taken at the meeting to allow Sri Lanka to export three million pieces out of the quota of eight million pieces of ready made garments under the FTA. Previously India had placed a condition on the export of garments from Sri Lanka to India which stated they could do so only by using Indian fabric. This restriction was also removed. No decision was taken on further liberalization on the negative list but it is expected to be taken up later by both countries.