News
India, Lanka hold ETCA talks; no decision on medical exports
View(s):By Namini Wijedasa
Officials from India and Sri Lanka held another round of talks this week on the proposed bilateral Economic and Technology Cooperation Agreement (ETCA), with at least two more rounds required to resolve outstanding issues, including a new Indian request for expedited Sri Lankan regulatory clearance for its medical exports.
ETCA seeks to build on the 2000 Indo-Sri Lanka Free Trade Agreement (FTA) to broaden the scope of economic, trade, investment, and technology cooperation between the two countries. It covers both goods and services. There are several chapters, including customs cooperation and trade facilitation, trade remedies, and phytosanitary measures. Negotiations on some are concluded. The next round is expected to take place in October.
India has proposed an “annex” related to the health sector to be inserted into the chapter on technical barriers to trade, sources familiar with the talks told the Sunday Times. The delegation wanted consensus on certain regulatory processes and pricing policies related to pharmaceutical imports from India. Sri Lanka countered, however, that this could go into the chapter on economic cooperation and that further consultation would be required with the local health sector—including medical professionals, the pharmaceutical industry, and the relevant ministry—before a commitment is made.
“Their main concern was the length of time taken to register products when pharmaceuticals, including new drugs, are to be imported,” the sources said. “The Sri Lankan side maintained that procedures and regulations are in place because we are dealing with human lives, and we will return after further discussion with the stakeholders, including on whether there is a need for an annex.”
India is a major exporter of medical supplies to Sri Lanka. The lengthy approvals procedure—which Sri Lanka’s National Medicines Regulatory Authority is now in the process of digitalising—applies to imports from all countries.
The two sides have agreed to the principle of asymmetry in their economies and (accordingly) reached an in-principle consensus that India will liberalise 60-65% of goods in its negative list while Sri Lanka will correspondingly liberalise 35-40% of its negative list.
Negative lists are items for which there are no tariff concessions from either side. Consultations will now be held in the respective countries regarding which products can be taken off the lists—that is, to be made duty-free.
Talks on the liberalisation of services are nearly concluded, the sources said. But while India wanted a separate chapter on the movement of natural persons—that is, employment of citizens in each other’s countries—Sri Lanka has expressed reluctance. It was conveyed to India that the movement of people could be considered where such professionals were linked to investments.
“For instance, if there is an Indian investment in Sri Lanka, a certain number of persons can be cleared to come,” the sources explained. Such professionals would be defined by role, and there could be a ratio whereby a specified number of Sri Lankans are hired per Indian employee.
Sri Lanka has also urged India to remove quotas, especially the proposed 8 million piece cap on apparel from Sri Lanka (there is also a 2,500 MT limit on pepper, but large quantities of Sri Lankan pepper are exported to India outside of this). These items were quota-free under the original FTA, and Sri Lanka has not placed this restriction on any imports from India.
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