The Hindu Business Line : Sri Lanka woos Indian investors

INDIAN investment in Sri Lanka is showing an upswing in recent years and is poised to add another $225 million through 70-odd companies in the next 18 months, according to Mr C. Ignatius, Senior Manager - Promotion, Sri Lanka's Board of Investment.

Sri Lanka is emerging as an attractive proposition as export base and more recently, as product testing base of Indian companies eyeing the global market, Mr Ignatius said.

The SAFTA (South Asian Free Trade Agreement) signed in 1998 and in force from 2000, he said, has been a big spur to trade and investment in the island nation.

The growth in investment is significant compared to 73 Indian units having set shop there till date with total investment of over $200 million; in 2000, there were just 48 companies with $131 million.

Mr Ignatius was addressing a joint meeting of a Sri Lankan delegation with the Greater Mysore Chamber of Industry (GMCI) and the American Chamber of Commerce (Karnataka Chapter) here today. The delegation is to visit Chennai, Mumbai and Delhi to explore business, investment and joint venture opportunities in Sri Lanka.

Ceat, for one, has emerged the largest tyre maker in Sri Lanka, now exporting tyres to India, the Philippines, Singapore and African countries. The island nation has also become a key product testing platform for prime projects such as Apollo's upmarket clinics and IOC's boutique' petrol pumps. The other majors are Taj Hotels, Tata Tea, Ashok Leyland, Numeric Power Systems, Motherson Group and Surya Medicare.

Sri Lanka's advantages were in its strategic location, quick facilitation and comprehensive assistance to exporters, he said.

For prospective Indian investors, the sectors of opportunity were telecom, power and energy, financial services, agribusiness and industrial segment. The current presence is in light engineering, electronics and electricals, textiles, infotech, BPO and housing, with predominance in the manufacturing sector.

While India has brought nearly 4,000 Sri Lankan products under SAFTA's duty-free regime, Sri Lanka has cleared only 1,200 so far. By 2008, the remaining 2,700-odd products would become duty-free.

Mr M.K. Ramachandra, former GMCI President, made a presentation on Karnataka.

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