The Hon. Wasantha Samarasinghe

¶ 01 Hon. Speaker, the response is as follows:

¶ 02 1. Though Sri Lanka’s imports from India amounted to USD 3.760 billion in 2024, our exports to India were about USD 884 million, creating a trade gap. However, it is important to note this deficit is not a result of the Indo–Sri Lanka Free Trade Agreement (ISFTA). On the contrary, the ISFTA has been significantly beneficial to Sri Lanka by granting preferential market access, enabling our exporters to maintain and expand their presence in the Indian market.

¶ 03 Under ISFTA tariff preferences, Sri Lanka exported goods worth USD 493.22 million to India in 2024, nearly 50 per cent of our total exports to India. This clearly shows that over half of our exports to India are directly dependent on the preferential access provided by the agreement. Without the ISFTA, Sri Lanka would have lost nearly half a billion US dollars in export earnings.

¶ 04 Conversely, only about 8.6 per cent (USD 324.78 million) of our total imports from India entered under FTA tariff concessions. This indicates that the agreement has provided relatively greater benefits to Sri Lankan exporters than to Indian exporters.

¶ 05 Due to geographical proximity, supply reliability, historical and cultural ties, economic complementarities, regional linkages, investment relations, and strategic alignment, India is a natural trading partner for Sri Lanka even without an FTA. Therefore, using import statistics alone as evidence against the ISFTA is misleading. Data clearly show the agreement has strengthened Sri Lanka’s export performance and secured market access for our producers.

¶ 06 Sri Lanka’s challenge is not the agreement itself, but enhancing our export competitiveness and diversification to extract greater benefits from the opportunities it provides.