• UGI USER
  • Nov 03, 2023
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India, Sri Lanka Conclude 12th round of ETCA Talks

Why in the news?

India and Sri Lanka successfully concluded their 12th round of discussions on the Economic and Technology Cooperation Agreement (ETCA) in Colombo, Sri Lanka, which began on October 30. During these talks, the two delegations addressed a wide range of crucial areas, including “Trade in Goods,” “Technical Barriers to Trade,” and “Trade in Services.”

  • The negotiations aimed to revive the bilateral economic relationship between the two countries.
  • Both sides agreed to resolve specific matters, such as apparel quotas and pharmaceutical procurement, highlighting their flexibility to adapt and revise positions.
  • The India-Sri Lanka ETCA is pivotal for enhancing bilateral trade. In 2021, India was Sri Lanka’s top trading partner, with a total merchandise trade of $5.45 billion, underlining the substantial potential for economic collaboration.

Economic and Technology Cooperation Agreement (ETCA) 

  • Government of India initiated negotiations for an Economic and Technology Cooperation Agreement (ETCA) with Sri Lanka in 2016.
  • Objective of ETCA: to deepen and broaden economic and technological cooperation between the two countries, with a focus on trade in goods and services, investment, and technology transfer.
  • The negotiations for ETCA have been ongoing for several years, and the two countries have made significant progress in a number of areas.
  • Key issues, such as the scope of tariff liberalization and the treatment of sensitive products, remain to be resolved.

Key features of ETCA

  • Trade in goods: ETCA is expected to liberalize trade in goods between India and Sri Lanka by eliminating or reducing tariffs on a wide range of products. This would make it easier and cheaper for businesses in both countries to access each other’s markets.
  • Trade in services: ETCA is also expected to liberalize trade in services between India and Sri Lanka. This would allow service providers in both countries to compete in each other’s markets on an equal footing.
  • Investment: ETCA is expected to promote investment between India and Sri Lanka by creating a more transparent and predictable investment regime. This would make it easier for businesses in both countries to invest in each other’s economies.
  • Technology transfer: ETCA is expected to promote technology transfer between India and Sri Lanka through a variety of mechanisms, such as joint research and development projects and technology exchange programs.