Memorandum of Interest (MOI) signed between Sri Lanka and India for Milk supply

India, the world's largest dairy producer, signed an Interest Memorandum (MoI) with Sri Lanka on Friday to supply milk and milk products. The MoI signed at the opening at Pragati Maidan of the country's first-ever International Cooperatives Trade Fair. The government of Sri Lanka signed three MoIs, which showed interest in buying Indian milk. “The quantity and cost have not yet been decided,” a National Cooperative Development Corporation (NCDC) senior official said.

The Tamil Nadu Milk Cooperative Federation, which owns the brand Aavin, the Puducherry Milk Cooperative Federation, which owns the brand PonLait, and the Indian Potash Ltd. fertiliser company, have signed a separate milk supply pact with the Sri Lankan government.

India, with about 70 million farmers, is the largest milk-producing nation in the world. The country's milk production is expected to reach 175 billion litres this year, almost twice of what is expected to be produced by the US, the second-largest milk-producing nation.

OSL Take: Signing of the MOI is indicative of the growing business ties between Sri Lankan and Indian businesses as well as the increased confidence levels in the strength and growth potential of Sri Lankan businesses. Sri Lanka and India enjoy strong bilateral and trade ties that have been further strengthened by the FTAs between the two countries.

All this has resulted in many joint ventures/partnerships formed between Sri Lankan and Indian businesses. Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment, and the many trade agreements, as well as trade concessions enjoyed by the country, have made Sri Lanka the ideal business destination in the South Asian region.

Foreign businesses/investors looking at doing business with India could explore the possibility of setting up base in Sri Lanka. Also, Indian businesses/investors could confidently explore business opportunities in Sri Lanka as well as look at forming partnerships with local companies and vice versa.

VBS/AT/20191111/Z_TB1