Sri Lankan Export Development Board provides support for boat–building sector.

 

Boatbuilding is a targeted sector defined in the 2018-2020 National Export Strategy (NES) because it has the potential to make a vital impact on the country's foreign exchange earnings. Due to its strategic location and skills availability, Sri Lanka has an advantage in becoming the hub for boat manufacturing in the Asia region. The increasing demand for regional and local boats worldwide for fishing, construction, commercial, and recreational purposes has opened up tremendous opportunities and new markets for Sri Lanka.

The boat manufacturers must allow demonstrating their capabilities to the international market to leverage the opportunity offered. Keeping in line with this EDB began to promote the sector internationally by organising attendance at the Genoa Boat Show, held in Italy from September 19-24, 2019.

This exhibition is one of the largest yacht shows held annually in Europe. A leading manufacturer of Sri Lankan boats was able to obtain orders for the ships displayed at the show to the value of Euro 6900 (Ex-Factory), and other companies are negotiating with the market inquiries they received.

Given the importance of continuing Sri Lanka's international presence, EDB, with the assistance of the Sri Lankan Consulate General in Frankfurt, Germany arranged the participation of three boat building companies at the boot Düsseldorf Boat Show – Germany, held from 18-26 January, which is one of Europe's annual premier international indoor show.

Messe Dusseldorf GmbH arranged the 51st edition of the boot Dusseldorf Boat Show 2020. This year's show featured a large selection of products including yachts and motorboats by more than 1,900 exhibitors from 71 different countries. The show drew nearly 250,000 visitors.

The participants were able to establish positive relations with potential buyers, experience the latest developments, emerging trends in the boat construction industry, and yachting. Boot Dusseldorf offered a rare and detailed analysis of the boat building industry's trends and new developments and provided a perfect platform for showcasing boat builders ' boats and models.

A Sri Lankan firm has been able to connect with a Dutch manufacturing partner who has shown interest in starting development as a partnership in Sri Lanka. Both companies will further negotiate with customers who approach the exhibition. EDB will continue to promote the industry's ability to create more opportunities in the international market to increase the industry's global presence while providing an encouraging atmosphere for producers locally to pursue.

Research has already begun on creating a breakwater in Kapparathota to encourage the launch and continuation of a regulatory framework for the entire value chain of the boat building industry (excluding fishing boats). The EDB will also discuss the sector's problems with relevant government stakeholders.

OSL Take: The government of Sri Lanka's focus is on making the country a maritime hub in the Indian Ocean region. The latest achievements of the Colombo and Hambantota Ports indicates that the country is closing in on achieving the target. The port already has an industrial zone on the premises, which provides an ideal business space for companies engaged in exports and logistics.

All these developments would help Sri Lanka engage in trade activities with other countries. On the other hand, Sri Lanka could attract more cruise liners to the state by developing other harbours around the country and developing the required infrastructure facilities. Foreign businesses/investors should explore the increasing investment opportunities in Sri Lanka's ports and shipping sector.

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Sri Lankan Embassy in Japan features Sri Lankan tourism at ‘2020 Fukuoka Travel Exposition’

 

With support from the Sri Lankan Tourism Promotion Office, the Sri Lankan Embassy in Tokyo placed Sri Lanka Tourism at the ' 2020 Fukuoka Travel Expo ' in Fukuoka, about 1,200 km from Tokyo. It is one of Kyushu Island's most significant tourism events that has been attracted by several thousand. The event was held from 8-9 February at the Elgala Hall in Fukuoka Metropolitan City.

For the first time, the Sri Lankan Embassy participated in this festival, and many of the tourists attracted its tourism stall. We were very keen on learning about and visiting Sri Lanka in the future. Fukuoka Prefecture is Kyushu Island's central city (the third largest island in Japan's main five islands) and surrounded by other prefectures such as Saga, Nagasaki, Kumamoto, Oita, Miyazaki, and Kagoshima.

So positioning Sri Lankan tourism in this regional capital with a total of 13 million people was perfect. The Tokyo office of SriLankan Airlines and Karunakarala Ayurveda Spa & Resort Sri Lanka volunteered to assist the Embassy's tourism promotion stall.

OSL Take: After the setback experienced by the tourism industry after the Easter Sunday assaults, Sri Lankan tourism officials have started promotional campaigns to attract tourists to the nation. The government of Sri Lanka has already introduced a relief package to the tourism sector. Given all these developments, there are signs of revival in the country's tourism industry.

Given all these grants, there are indications of the resurgence in the country's tourism industry. Many foreign investors have already demonstrated trust and development potential in the country's tourism industry. Foreign businesses/investors could, therefore, investigate possibilities for business/investment in the tourism industry in Sri Lanka.

Sri Lanka’s geographical positioning, along with the many trade agreements and trade concessions enjoyed by the country, makes it an attractive business destination. Therefore, foreign businesses/investors could explore setting up businesses in Sri Lanka as the base for the South Asian region.

Finally, we see a Japanese big fish taking to the “investment waters of Sri Lanka,” and now the “eyes” of the international investment figureheads and pundits will stretch with anticipation about the investment potential of Sri Lanka.

OSL has been upbeat about the country’s potential, but many still went on the “wait and see policy” to take part in the country’s all sector boom spearheaded by the USD 44 billion Western Region Megapolis Masterplan (WRMM) aimed at making Colombo a dominant trading-hub by 2030. So, any party willing to consider Sri Lanka as a worthwhile investment destination could now consult the biz-friendly OSL Team for a country overview and the smart-investment-way forward with our local expertise and active links.

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Sri Lankan Export Development Board continues to promote Sri Lankan ICT opportunities in Japan

 

The Sri Lankan Export Development Board (EDB) is calling for applications from cutting edge technology companies to join its IT Week 2020 delegation to Japan from 8-10 April. More than 30 companies supported by the EDB, where delegates had opportunities to meet global investors and experts, learn about the latest trends in the industry and develop strategic collaborations while acquiring tech know-how that provides critical support for them to grow their businesses in the Japanese market.

As a result, Sri Lankan ICT and Business Process Management (BPM) companies have opened branches in Japan and entered into joint ventures with the Japanese firms and won prospective deals. This year, EDB will once again take part in Japan's IT Week 2020 to hold in Tokyo, Japan, from 8-10 April. It is the world's leading exhibition focused on ICT and BPM that offers a variety of opportunities for experts, suppliers, service providers and consumers to meet worldwide exhibitors and establish profitable business relationships.

The EDB has organised the Sri Lankan pavilion at Japan IT Week for five consecutive years since 2015, in line with the ongoing efforts of the Sri Lankan government to foster an export-driven economy, mainly through adaptation and innovation. This year marks the event's 29th edition and organisers have said it will draw 89,000 visitors and 1,490 exhibitors from around the world.

The ICT and BPM solutions providers in Sri Lanka are no newcomers to the IT industry in Japan, with many Sri Lankan companies already offering software, internet, big data and other solutions to leading Japanese companies such as Hitachi, Fujitsu and Canon IT Solutions. Such business lines have produced substantial export revenue for Sri Lanka, with government initiatives such as the IT Week mission to Japan expected to earn the additional country revenue.

Intending to promote the Sri Lankan ICT and BPM sector in Japan and vice versa, the EDB arranged a variety of workshops and client engagements within the Japanese market. This initiative is also an attempt to clear the concerns of most Sri Lankan companies on the Japanese market and to inspire them by sharing tips on how to win business deals successfully in Japan. The EDB organises the Sri Lankan Pavilion and Country Seminar for the sixth consecutive year, in partnership with the Sri Lankan Embassy in Japan, with the participation of 10 ICT and BPM companies interested in starting a business with potential Japanese clients.

OSL Take: The Telecommunications Ministry is finalising a digital identification card international tender. Over $55 million total costs will cover nearly the entire population. Another business/investment opportunity for foreign businesses/investors looking to enter the Sri Lankan economy is the Lotus Tower project of Sri Lanka.

The emphasis on developing Sri Lanka's digital infrastructure and enhancing its ICT sector will not only enable the country to become a digitised economy but will also provide enterprising individuals with ample opportunities to invest, innovate and introduce new techniques into this sector. Furthermore, Sri Lanka Telecom's launch of the ' National Digital Roadmap ' would pave the way for the digital journey of Sri Lanka would also open up a host of business/investment opportunities in the digital infrastructure sector of the country.

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SriLankan Airlines expands its footprint into the US and Europe

 

SriLankan Airlines is bolstering its footprint in the US and European markets by extending its current codeshare agreement with Qatar Airways, with new connections to serve different cities in these areas. SriLankan Airlines Group Chief Executive Vipula Gunatilleka said: "The extension of our corporation with Qatar Airways is an imperative component in SriLankan's ongoing ingenuities to provide our esteemed passengers with seamless connectivity across a wide range of destinations, except for increasing the number of cities to which we travel."

SriLankan will codeshare flights operated on Qatar Airways between Doha and Chicago's O'Hare, George Bush, Dallas-Fort Worth, Boston Logan, and Dulles International Airport in the US capital Washington DC, Madrid-Barajas Airport, accordingly with effect from February 8.

This proposal is the second phase of the recent expansion of the codeshare agreement between the two airlines, both members of the Oneworld global airline alliance, which links passengers via 13 member airlines to over a thousand cities in more than 180 countries and territories.

Phase 1 of the project was completed in the last quarter of 2019, adding a considerable number of destinations to both airlines ' networks. SriLankan's route network will cover 116 cities in 51 countries with the addition of Houston, Dallas-Fort Worth, and Boston as codeshare destinations.

By codeshare agreements with other partner airlines, SriLankan already serves Chicago, Washington DC, Madrid and Larnaca. Code-sharing arrangements are commonly used by similar airlines to strengthen their operations in various parts of the world. Passengers of SriLankan Airlines will now have the option of seamless long-distance travel via one travel booking through Doha. SriLankan has a variety of deals with other airlines, including codeshare.

OSL Take: Sri Lanka’s airport and aviation industry are currently undergoing a facelift with the government of Sri Lanka, giving prominence to the development and upliftment of the country’s airports, including the main international airport in the island. Sri Lanka’s national carrier is also undergoing a restructuring program. The airline is also on the lookout for a foreign investor to form a joint venture operation for the airline. Sri Lanka’s geographical positioning in the Indian Ocean region, the ease of doing business environment, and the strong trade ties with foreign nations have made Sri Lanka the ideal business destination in the South Asian region. All this indicates the growing business/investment potential in Sri Lanka’s airport and aviation industry.

The government of Sri Lanka is engaged in a program to uplift the country’s airport and aviation industry by launching a plan to develop regional airports in several parts of the country. The local airports aimed at further developing Sri Lanka’s connectivity to foreign destinations and trading markets. It has also helped boost the country’s tourism industry and the operation of many international airlines to the island.

Further, Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country, and the strong trade ties with other countries as well as the continuously growing tourism industry make the island the ideal business/investment destination in South Asia. Foreign businesses could, therefore, confidently explore business opportunities in Sri Lanka’s airport and the aviation industry as well as the opportunities in developing additional infrastructure facilities.

Thai PM says they are ready to support Sri Lanka’s economic development

 

Thailand's Prime Minister Gen. Prayut Chan-o-cha remembering the close bilateral ties between the two countries, told Thailand's support for development efforts in Sri Lanka. He made those remarks when on February 3 at the Government House in Bangkok Ambassador Samantha K. Jayasuriya, Sri Lanka's envoy to the Kingdom, issued a courtesy call to him.

During the meeting, Ambassador Jayasuriya conveyed President Gotabaya Rajapaksa's greetings and noted that the friendship between Thailand and Sri Lanka, deeply entrenched in the Theravada Buddhist traditions, extends many centuries and assures her full cooperation and constructive commitment to deepen the socio-cultural relationships further.

She for assistance to become a Sectoral Dialog Partner (SDP) in ASEAN in Sri Lanka. Ambassador Jayasuriya also highlighted Sri Lanka's steps towards this end through maritime security initiatives, capacity-building support for the region's emerging countries. General Prayut, while remembering his successful visit to Sri Lanka in 2018, said Thailand is ready to assist Sri Lanka in its growth and will extend support, particularly in agriculture, technical cooperation and tourism.

He recapped the importance of completing the proposed FTA between the two countries, which would allow Thailand and Sri Lanka to expand trade and investment. The Prime Minister also noted the exchange of sacred relics that contribute to strengthening cultural and religious relations between the two nations.

The meeting was held cordially with the participation of senior PM officials including PM Deputy Secretary-General Bansarn Bunnag and senior Thai Foreign Ministry officials, while Chancery Head Poornima Gunasekera accompanied the Ambassador, First Secretary (Commerce) Anil Sirimanna and Second Secretary Saritha Ranatunga.

OSL Take: Sri Lanka and Thailand 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 Thailand businesses. Sri Lanka’s strategic geographical positioning in the Indian Ocean, its ease of doing business environment, and the several 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.

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Sri Lankan e-commerce industry trends and growth: An overview of the Daraz e-commerce index

 

Over the last year, Sri Lanka's e-commerce industry has seen rapid development, with a large percentage of shoppers venturing onto the digital platform. A rise in trust on available goods and online payment gateways has accompanied the shift in attitude towards e-commerce. Specifically, as Sri Lanka's largest online marketplace, Daraz saw a considerable increase in terms of orders and net market value in 2019 along with a drastic increase of 11.1% YoY growth in sales.

Collecting data from its platform, Daraz released an e-commerce index that shows key demographics, consumer behaviour and online shopping trends in Sri Lanka. The figures show a 1.5X YoY rise of active users with a 2.5X increase of last year's number of orders.

The western province holds 50 per cent of the largest online order share while the central and northwestern areas follow with 10 per cent and 9 per cent order shares, respectively. With 31 per cent in the former and 15 per cent in the latter, Colombo and Gampaha lead the district wise order distribution. Concentration at these locations is a reflection of the country's population density.

Concentration at these locations is a reflection of the country's population density. There is, however, an indication that main cities such as Colombo, Gampaha and Kandy are expanding towards developing towns such as Kurunegala, Kalutara and Gampaha. Of Sri Lanka's total online shoppers, 85 per cent claim to have shopped on Daraz with 94 per cent using the Daraz Mobile Online Shopping App, which is available on both common mobile OS platforms. The Daraz mobile app is considered the best mobile online shopping app for Android and also the best mobile online shopping app for Apple iOS, particularly in Sri Lanka.

Shoppers with different shopping behaviours fell into three specific groups. Recreational shoppers who enjoy searching for the latest trends are the 'young internet shoppers' aged between 18 and 24 years. They 're tech-savvy, brand loyal and less price-conscious. The 'well-educated shopper' consists of the 25-30 year age group, whose decisions are influenced by consistency and reliability. Although there is brand loyalty, this category also looks for the best deals and flash sales, with a majority of personal and home items in their shopping cart. They are conscious of consistency, are less adventurous and expect prompt delivery.

The Daraz e-commerce index uses two metrics; the percentage of the overall net merchandising value, and the percentage of orders. The average order value increased by 27.27 per cent in 2019. Health and Beauty goods online came in close to second while LED TVs, Audio/Video, and Gaming Consoles have continuously sustained their development in terms of category.

During November and December, both categories show an improvement in both sales revenue and order numbers, with the highest “11.11 sale” in Sri Lanka, followed by Black Friday in Sri Lanka and the seasonal Christmas sale taking place in these months. Therefore, the local online shopper follows global trends and indicates a positive direction for e-commerce.

OSL Take: Sri Lanka is currently engaged in a programme to transform the country into an e-economy. The regime of Sri Lanka has launched many programmes and provided many incentives to businesses involved in ICT to help develop the country's ICT and digital infrastructure sectors. As a result of all this, business/investment opportunities in Sri Lanka's ICT and digital infrastructure sectors have expanded.

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Exploring investment opportunities between New Zealand and Sri Lanka

 

On 29 July at 11 a.m., the Ceylon Chamber of Commerce, in partnership with the Sri Lanka-Australia-New Zealand Enterprise Council and the New Zealand Trade & Enterprise (NZTE), will hold a webinar on "New Zealand - Existing Market and Education Climate, Developments and Opportunities for Joint Collaboration”.

Due to COVID-19 trends, opportunities for collaborations between New Zealand and Sri Lanka, and plans of the New Zealand High Commission to be formed in Sri Lanka in 2020, the main objective of this joint initiative is to educate the business community in Sri Lanka on changes in the business climate.

Around 16,000 Sri Lankans live in New Zealand. Current education linkages between the two countries have allowed more than 1,000 students from Sri Lanka to study in New Zealand. New Zealand has a consumer economy, and a substantial portion of GDP is in the service sector. The economy depends on trade with other countries around the world.

According to Ralph Hays, New Zealand Trade Commissioner for Sri Lanka and South Asia, persons, protected and assets include

•      "NZ economy, the effect of COVID-19 and export plans, new High Commission plans for Sri Lanka, upcoming trends and innovations."

•        "NZ private sector current threats and opportunities faced by NZ small to medium-sized exporters and what these businesses look for in terms of business relationships in foreign markets" by Geoff Allott, Director & CEO, Performance NZ.

•       Jugnu Roy, Country Manager-South Asia of Education New Zealand will present "NZ Education market, latest trends and opportunities."

New Zealand's primary industries include the agricultural and horticultural, mining, and fisheries sectors. New Zealand's main exports include dairy products, beef, logs, and wood products, fruit, machinery and equipment, wine, fish, and seafood. According to the UN COMTRADE report on foreign trade, New Zealand 's exports to Sri Lanka totalled $272.82 million during 2019. High-quality Ceylon tea and cinnamon is ubiquitous in New Zealand, as well as gems and jewellery, clothing etc.

OSL Take: The discussion held between the New Zealand business delegation and the opening of a New Zealand High Commission in Sri Lanka next year are indications of the growing bilateral and trade ties between Sri Lanka and New Zealand. The developing relationship between the two nations would broaden further business/investment opportunities between businesses in both countries.

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Sri Lanka's forex reserves rebound in June to US$ 6.7bn: Central Bank

 

Sri Lankan forex reserves have risen from $6.49 billion in May to $6.7 billion in June, helping with retail purchases and rupee-dollar swaps amid restrictions on imports, officials said.

Sri Lanka's rupee collapsed to nearly 200 US dollars where interventions are minimised after printing money causing the peg to fall, and importers fear into new bill cover. It follows an increase in private credit in March fired by liquidity injections and a fear-inducing 'flexible exchange rate'.

Private credit dropped in April, and a pick-up occurred in May. The Central Bank sold $174 million in March to defend the peg and $98 million in April partially. Private credit in April dropped to 12 billion rupees, but in May it raised to 30 billion rupees. The Central Bank purchased 61 million US dollars in May to prevent appreciation, data show.

"Our net intervention would be nil by today or tomorrow," said Chandranath Amarasekera, Director of Economic Research at the Central Bank. He said the other fall in the balance had been due to debt repayments. The fall of the currency caused sweeping import controls of the type 'Nixon effect' unseen since the 1970s.

The Central Bank funded the budget with printed money and pumped excess liquidity into the banking system at the overnight rate. Central Bank Governor W D Lakshman said import controls had improved the rupee's value.

"However, the ban on imports and investments, allowing for a gradual recovery of inflows, has helped to stabilise the exchange value over the past three months," said Governor Lakshman.

Some countries do not print money as Sri Lanka does. Such states, for example, Thailand and Vietnam, have seen their currencies stable or rise as credit and demand weakened, whereas countries, where the law forbids money printing, including Singapore and Hong Kong, have improved.

In the first week of March, Hong Kong, which operates a currency board at 7.8 per US dollar, saw the currency reach the upper trading band at around 7.79 per US dollar and is now trading on the lower trading band at 7.74 per cent.

OSL Take: The increase in foreign holdings in Sri Lanka rupee bonds is indicative of the level of confidence in Sri Lanka's economy and interest in investment. Therefore, foreign investors could confidently explore investment opportunities in Sri Lankan bonds.

Sri Lanka's export portfolio has expanded continuously, and now poultry will be added to the long list of exports.

Among the many advantages afforded by Sri Lanka is its ecological positioning in the Indian Ocean, the ease of doing business environment, its many trade agreements as well as the trade privileges it enjoys.

All this has made the island a business hub and the best venue to carry out exports to the global market. Foreign businesses/investors could, therefore, explore business opportunities in Sri Lanka's export market.

 VBS/AT/11082020/Z_TB4

The first half of Sri Lankan tea buyers led by Iraq, Turkey and Russia in 2020

 

In the first half of 2020, Sri Lanka produced 129.04 million tonnes of tea down 18.76 per cent from a year earlier, and exported 129 million tonnes, down 14.50 per cent, with Iraq, Turkey, Russia and Iran being the top buyers, a tea broker said. Sri Lanka saw production and sales disruption following the implementation on March 20 of a coronavirus lockdown. Still, the sector slowly returned to service as the government selectively allowed the economic activity to resume.

In the first half of 2020, Iraq had purchased 16.2 million tonnes, down from 19.6 million tonnes in 2019, and Turkey 15.7 million tonnes from 18.1 million tonnes, Customs data released by Ceylon Tea Brokers revealed. Russia purchased 14.4 million Ceylon tea down from 14.9 million a year earlier while Iran purchased 8.9 million tonnes.

Certain CIS countries purchased 6.7 million tonnes while China purchased 5.0 million tonnes and Chile purchased 4.6 million tonnes. Syra had purchased 3.5 million tonnes of tea from Sri Lanka and 3.4 million tonnes from Saudi Arabia, and 3.3 million tonnes of tea from UAE.

In the first six months of 2020, Sri Lanka sold 56.8 million kg of bulk tea taking in 42.7 billion rupees, down from 59.9 million kilograms (44.4 billion rupees) a year earlier. Sri Lanka sold 54.2 million kilograms of tea in packets worth 43.7 billion rupees, down from 69.4 million kilograms in the previous year.

With 75.4 million kilogrammes of mid-growth developed, low-growths led the table to 22.7 million kilogrammes, and high-growths amounted to 30.8 million kilogrammes. The total volume of tea exported for June 2020, including re-exports with imported tea, amounted to 23.69 million kilogrammes, showing a decrease of 0.42 million kilogrammes or 1.73 per cent in contrast to the same time last year.

Total export earnings were up 1.39 billion rupees compared with the same month in 2019. In the first six months of 2020, Sri Lanka received 106 billion rupees from tea exports. Output in June was down 26.8 million kilogrammes from last year's 27.5 million kilogrammes.

The output for June, in terms of the elevation-wise breakdown, showed that 57.1% of the tea produced was low-growth while only 15.9% were mid-growth drinks, while 27% of high-growth beverages. In the last few auctions, tea auction prices showed mixed patterns as the market now worked following a price correction caused by pre-lockdown bulk purchases following a period of tea starvation back in April.

OSL Take: The government of Sri Lanka has in the past few months taken several steps to develop the country's tea industry. Local tea exports have also recorded an increase. The country's tea industry, which manufactures the world-renowned Ceylon Tea brand, is open for investments. Foreign investments are now free for the upgrading and development of the tea sector.

The state has also given stakeholders in the industry many incentives. All these have increased business/investment opportunities in the tea industry.

Interested foreign investors can now explore investment opportunities in Sri Lankan tea.

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The government subsidises the power and energy sector with a relief program

 

The government is making further concessions to consumers of electricity who got huge bills after the lockdown ended. At their weekly meeting today, the Cabinet of Ministers considered several consumer concessions proposed by Power and Energy Minister Mahinda Amaraweera and agreed to reduce electricity bills by 25 per cent in March, April and May when electricity consumers consumed electricity units between 0-90 units.

Co-cabinet spokesman Bandula Gunawardena said they would give those consumers a three-month grace period to pay up and they will incur no disconnections or late fees. He said Amaraweera had told the cabinet that this relief package would provide a direct advantage to around 73 per cent of in-house electricity consumers.

However, he said this relief package will cause a massive loss to the Ceylon Electricity Board (CEB) but would provide relief to those affected by COVID-19. However, despite the damages to be borne by the CEB and other providers, he said the President, the Prime Minister and cabinet members discussed further on giving more relief to electricity consumers.

Gunawardena said Minister Amaraweera asked to find out any further relief that consumers could receive through this package, such as raising the 25 per cent reduction to 120 units and presenting it to the cabinet next week for approval. He said the relief measures that he has already granted would not change, but it will not be the final decision on relief for consumers of electricity.

The state regulatory body, the Sri Lankan Public Utilities Commission (PUCSL), had proposed a formula for the CEB and the other provider Lanka Electric Company Ltd. to apply to reduce bills that became inflated when meter readers were unable to operate during the lockdown.

LECO has already implemented the formula, and its subscribers were granted the concessions as of this month. It is not known whether the relief measures proposed at the cabinet meeting yesterday would also extend to LECO customers.

OSL Take:

Sri Lanka's power and energy sector have become a hotspot for business; to explore investment opportunities in the country. The expansion and extension of the country's economy have increased the demand for power in Sri Lanka. Experts have predicted a looming power crisis in the country in the event economic activities reach high capacities. Sri Lankan authorities are therefore looking at renewable energy generation options to ensure low generation costs as well. Being a tropical country, Sri Lanka has much potential for solar and wind power generation. Foreign businesses/investors exploring business/investment opportunities could, therefore, explore business/investment opportunities in Sri Lanka's power and energy sector.

 VBS/AT/11082020/Z_TB2

Two new hospitals to be established in Moratuwa Medical Faculty for student training

 

The Homagama Base Hospital and the Nagoda General Hospital are to established as National and Teaching Hospitals to assist in clinical training at Moratuwa University for the proposed medical faculties. Co-cabinet spokesman Bandula Gunawardena told reporters today that a significant move is needed to establish a new medical faculty as a national or teaching hospital for the students' clinical training needs, i.e. to develop another medical school.

The creation, accepted yesterday by the Cabinet of Ministers, is the culmination of a proposal made by former JVP Kalutara District MP Dr Nalinda Jayatissa as a private member to Parliament in 2018. Jayatissa argued at the time that Sri Lanka only has 50 per cent of the number of medical doctors and medical faculties available. Currently, State Universities can accommodate only 1,200 to 1,300 medical undergraduates per year. Hence, the need to create two more medical faculties to increase student intake is of significant importance.

Jayatissa moved two private member motions to set up medical faculties at the Universities of Uva-Wellassa and Moratuwa, with Badulla and Nagoda Hospitals proposed as "teaching hospitals." "To that end, it agreed to take over the Kalutara General Hospital and Homagama Base Hospital and begin the process of development to turn them into national or teaching hospitals," Gunawardena said.

The Base Hospital in Homagama is currently a care facility for patients with COVID-19. Later, the then government included in their annual budget plan the plan to create a medical faculty at Moratuwa University. Later the same year, the then government involved in their yearly budget plan, the program to develop a medical faculty at Moratuwa University.

The pharmaceutical industry in Sri Lanka is estimated at USD 400 million annually. Regulating the pricing of these medicines has a significant effect on the population's health. The revised drug price formula implemented in 2016 guarantees that essential drugs should always go for below the maximum recommended retail price. 

Due to a very ageing population, the demand for healthcare facilities is increasing in Sri Lanka. At the end of 2017, nearly 10% of the population was 65 years. Experts predict that this figure will double by 2030. The government stands clear on its policy of offering public hospitals with free health care. In 2018, government spending on the health industry amounted to about $1.3 billion. Increasing access to private health services is also a government focus, as meeting the demand for healthcare services is hard for the public sector alone.

The private sector has made significant investments in health care, particularly in Colombo and some of the main towns, which has eased some of the state's burden. With higher revenue rates and shifting preferences, demand for healthcare in the private sector has risen. Health insurance provision has also backed development in the private healthcare industry.

OSL Take: The construction of two new hospitals indicate the upliftment of the primary healthcare sector in Sri Lanka reports the development/investment opportunities in Sri Lanka's health sector. The government of Sri Lanka has also placed importance in the country's health sector and is looking at developing the existing structure while also considering new options to be included in the system. The state has also given priority to the manufacturing of pharmaceuticals within Sri Lanka with foreign assistance.

 VBS/AT/11082020/Z_TB1

Sri Lanka resumes negotiations with India on the East Terminal port of Colombo

Sri Lanka is continuing talks with India on the development of a container terminal in the Port of Colombo; information minister Bandula Gunewardene said as protests continued against port workers. "The last government signed a treaty with India," said Minister Gunewardene. "Becoming emotional or excited is not the policy of the President and this nation. Talks will fix problems. Whether it's the US, China or India, matters will be discussed at the diplomatic level with friendly countries”.

The last administration of Sri Lanka signed an agreement with India and Japan to complete the development of the partially built Colombo Port East Container Terminal through an operating company, with a loan from the port. With rising debt rates, however, top officials favoured a regular building and operating transition arrangement with investors investing in equity and assuming debt obligation.

Reports said Adani Ports of India and John Keells Holdings of Sri Lanka along with the Sri Lankan Ports Authority are a contender to complete the development as a BOT contract. A senior official said there would be a majority stake in Sri Lanka through SLPA and local investors. However, bids were called upon to build the port as a BOT deal with local and international consortia responding when the project halted when Ranil Wickremesinghe was Prime Minister.

But concerns remain about Sri Lankan's distinct claims and evaluations of 'selling of national properties' when it came to the straightforward, long-term transfer of Hambantota's ownership and control to China, and now Indian's restricted involvement in ECT. President Gotabaya Rajapaksa unilaterally declared in the run-up to his election last year that he would re-negotiate the Hambantota swap agreement if elected. Nonetheless, on taking office, he said he figured out it was a 'business offer' and nothing could do about it.

It sounded familiar to Sri Lankan watchers, who saw a similarity to rival Ranil Wickremesinghe unilaterally proposing to cancel the Colombo Port City agreement with China ahead of the 2015 presidential polls. It later settled for a changed version after becoming prime minister under newly elected President Maithripala Sirisena.

Away from the media glare, the two countries are holding talks for India to reschedule Sri Lanka's 900 million-dollar Indian debt, as Prime Minister Mahinda announced during his visit to India.

According to the economist and former minister, Harsh de Silva, the regime of President Gotabaya added LKR 1,000 billion (5.38 billion) to the national debt in the first four months of the current fiscal period, starting in January. The amount as mentioned earlier is relative to the predecessor's LKR 5,700 billion ($31 billion) in five years.

OSL Take: OSL Take: Sri Lanka and India boast of strong bilateral and trade ties that have been further bolstered by the free trade agreement (FTA). Sri Lankan businesses are, therefore given preferential treatment when engaging in business ventures in India. Local companies could use this benefit to form joint ventures/partnerships with Indian companies. Foreign businesses/investors looking at doing business with India could explore the possibility of setting up base in Sri Lanka to reach out to the Indian market.

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Sri Lanka’s Central Bank guarantees Covid-19 credit facility to all SMEs

Sri Lanka’s Central Bank said it would guarantee banks loans to affected coronavirus businesses from their funds as well as 175 billion liquidity rupees generated through two reserve ratio cuts. “Under this scheme, we are allowing banks to grant loans to meet the working capital requirements of the businesses concerned,” the monetary authority said in a statement.

The Central Bank said it would operate in parallel with a refinancing (printed money) scheme of 150 billion rupees. The Central Bank reported banks could use their deposits or the liquidity released from two cuts in the reserve ratio, which amounted to nearly 180 billion rupees and offer 4 per cent of the loans.

The guarantee would preferably have come from the Treasury. However, any losses from central banks will also end up at the Treasury, analysts note. Unlike primary bank refinancing, there is no strain on the rupee or foreign reserve losses when banks donate their funds.

The Central Bank already pays 5.5% for money released from SRR cuts, which to some extent will discourage misinvestments. The Central Bank is injecting capital at 1 per cent on the 150 billion rupee refinancing, while the policy rate is 6.5 per cent.

This system, launched on 1 July 2020, will run in tandem with the Saubagya COVID-19 Recovery Facility and the new provision approved by the Monetary Board according to Section 83 of the Monetary Law Act, within the already announced Rs. 150 billion thresholds.

Below this scheme, the Central Bank will provide banks with a credit guarantee, varying from 80 per cent for less significant loans to 50 per cent for comparatively large loans, allowing banks to grant loans to meet the working capital requirements of the businesses concerned.

With the Central Bank attracting a significantly higher percentage of credit risk, banks can extend their lending to vulnerable businesses focusing on such businesses’ viability and cash flows, rather than collateral. Banks will have to use their funds, in particular the additional liquidity of close to rupees one hundred eighty billion provided by the Central Bank through a cumulative reduction in the statutory reserve ratio (SRR) of 300 basis points so far during the pandemic period, to grant companies loans of 4 per cent.

The Central Bank must offer a 5 per cent interest subsidy to cover the sum of bank deposits. Operating guidelines for this scheme will be given to banks in due course immediately.

OSL Take: The government of Sri Lanka has not left any stones unturned in the path to bring the country’s economy back to normalcy following the post-COVID 19 pandemic situation. Given Sri Lanka’s terrestrial positioning in the Indian Ocean, the ease of doing business environment and the many trade accords, as well as trade discounts enjoyed by the country, all will undoubtedly expedite the country’s economic revival. Foreign businesses/investors could, therefore, explore business/investment opportunities in Sri Lanka with confidence.

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Sri Lanka is cutting policy rates by 100bp during the slowdown of Coronavirus

Sri Lanka has slashed the policy rate by 100 basis points. The action means that one can inject money into the banking system at 5.50 per cent and withdraw excess money at 4.5 per cent.

"The Board arrived at this decision to induce a further reduction in market lending rates, thereby encouraging the financial system to aggressively improve lending to productive sectors of the economy, which would reinforce support for COVID-19 hit businesses as well as the wider economy, given the conditions of subdued inflation."

"While recovery expected in the second half of the year with the help of monetary and fiscal stimulus measures, the implementation of growth and confidence-building structural reforms is necessary for fostering strong and sustainable economic growth in the medium term."

Money market rates drifted around the earlier floor policy rate of 5.50 per cent amid excess liquidity injected in March and April through domestic asset purchases, which caused currency pressure and hit businesses and the economy in general.

Nonetheless, private credit was also low, which tends to hold rates close to the floor rate. As analysts have shown, Sri Lanka's Central Bank typically triggers monetary uncertainty by injecting massive amounts of money to keep the price below the maximum rate or in the middle of the corridor as the market regains from the last balance of expenses crisis and borrowing picks up.

Credit to the private sector was around 30 billion rupees in May, data shows, although there is a pickup in government credit as the deficit spreads. The Central Bank has also reduced the legal reserve ratio, with Sri Lanka's interest rates being one of the factors being higher than other countries with more excellent monetary stability.

Excess liquidity from purchases of domestic assets ultimately leads to foreign exchange shortages (and reserve losses when liquidity is mopped up by dollar sales) in a fixed exchange rate system when credit picks up. The Central Bank has withdrawn some excess cash from the system over the past week. Further money is also to provide through the ref-financing of bank loans by central banks and the discounting of contractors bills.

OSL Take: The government of Sri Lanka has made all arrangements to ensure a hassle-free and safe visit for tourists planning to make a trip to the island. With international airlines all geared to recommence flights to Sri Lanka, the country is now geared for foreign travellers looking at leisure/business/investment opportunities. The World Health Organization has recommended Sri Lanka as one of the safe countries concerning COVID 19. Hence, Sri Lanka’s tourism industry shows signs of picking up from where things stopped before the COVID 19 lockdown. Foreign businesses/investors looking at opportunities could explore business/investment opportunities in Sri Lanka’s tourism industry.

Many large scale real estate development plans that were on hold during the COVID 19 lockdown have now recommenced operations. Given Sri Lanka’s resumption of economic activities much faster than other countries in the region, business opportunities in Sri Lanka are expected to open up more quickly than anticipated. Also, Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment, the many trade accords as well as trade reductions enjoyed by the country will undoubtedly help Sri Lanka regain its position as a business hub in the South Asian region. Hence, this will create many business/investment opportunities in Sri Lanka’s real estate development as well as construction sectors.

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Sri Lanka calls for foreign bids to purchase four helicopters

Sri Lanka will call for international tenders to buy four used Sri Lankan Air Force (SLAF) helicopters to prepare pilots for Peacekeeping Missions. Co-Cabinet spokesman Romesh Pathirana told reporters today July 9th President Gotabaya Rajapaksa on behalf of the Defense Ministry had sought approval from the Cabinet to make the purchase.

Pathirana said the SLAF currently trains Pilot Officers using two 1981 helicopters. “Currently, units of Sri Lankan Air Force are on peacekeeping missions in Sudan and Central Africa. It has been identified as a prime necessity to train and assign new pilots to those units“, Pathirana said.

The Departments of Government and the Armed Forces are to keep vehicles unclaimed and held by Customs, the Minister’s Cabinet has agreed. Co-Cabinet spokesperson, Minister Romesh Pathirana said, these vehicles, referred to as escheat vehicles, would be provided to meet State authorities’ demand for cars.

Prime Minister Mahinda Rajapaksa presented the cabinet proposal for that move. Pathirana said government organisations had requested vehicles for the respective organisations including the Armed Forces.

OSL Take: The Sri Lankan is in the process of making necessary arrangements to reopen the country to foreign visitors from August 1st. The country’s economic activities have already restarted, and the tourism industry will kick start from August 1st.

Given Sri Lanka’s geological positioning in the Indian Ocean, the ease of doing business environment, the many trade deals, as well as trade reductions enjoyed by the country, it will be easy for the island to become a business hub in the South Asian region. Foreign businesses/investors could, therefore, confidently explore opportunities in Sri Lanka.

International airlines have already made arrangements to resume flights to Colombo, expressing confidence in the manner in which Sri Lanka has contained the spread of COVID 19. Foreign businesses/investors interested in exploring opportunities in Sri Lanka could confidently make arrangements to visit the island soon.

Also, Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment, the many trade contracts as well as trade reductions enjoyed by the country will help Sri Lanka regain its position as a business hub in the South Asian region. Business/investment interest in Sri Lanka would, therefore, see an increase shortly. Foreign businesses/investors could, therefore, explore business/investment opportunities in Sri Lanka’s real estate sector.

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South Korea's third-largest conglomerate committed to investing more in Sri Lanka

Dr A. Saj U. Mendis, Sri Lankan Ambassador to the Republic of Korea, met with the top management of SK Group, South Korea's third-largest conglomerate (Chaebol), to discuss investment and FDI in Sri Lanka. Dr Mendis has met with the President and CEO of SK E&S Co Ltd. for the same, including Jeong Joon Yu as well as the Board of Directors at the head office of the company.

With regards to sales and market capitalisation, the SK Group is one of the biggest companies in the world. SK Group's income was $220 billion in 2019, and the market value was close to $280 billion, making SK Group one of the world's 25 biggest companies. The business has 95 branches and employs more than 70,000 people worldwide. Among other things, the SK Group has a stellar global reputation in companies such as chemical, petroleum, oil, wireless mobile services, financial services, telecommunications, manufacturing, shipping and semiconductors.

The discussion with SK E&S' CEO and Board of Directors focused on, among other things, an LNG project to be set up on Build-Own-Operate-Transfer (BOOT) in Sri Lanka for a total cost of $600 million in LNG delivery. The technical experts claimed, during the discussion with Ambassador Dr Mendis, that the proposed project would be able to supply 930 MW of LNG power plants in Sri Lanka. The proposed megaproject will create semi-skilled and skilled jobs for nearly 1,000 nationals of Sri Lanka. The proposal mentioned above has been discussed and deliberated with the appropriate Sri Lankan authorities and is pending final clearance.

SK E&S' CEO and Board of Directors also told D. Mendis that the SK Group is keen and eager to invest more in Sri Lanka, particularly in sectors such as IT and ITES, construction and telecommunications, among others. Ambassador Dr Mendis said a clear and compelling presentation of a company in the SK Group calibre in Sri Lanka would emanate a positive perception and message of Sri Lanka's potential to foreign corporations and investors.

Dr Mendis also pointed out that Sri Lanka's equity (stock) market, also known as the Colombo Stock Exchange (CSE), is highly attractive to woo foreign institutional investments (FII) since the CSE's price earning ratio is 10.8. Any stock market with a P/E ratio of less than 15 with a vibrant and diversified economy will be highly desirable and financially sanguine for any large-scale institutional investor, especially foreign investors and private equity (PE) firms.

SK E&S' top management paid due attention to Sri Lanka's economic and investment views and added that they would look positively and favourably at Sri Lanka. On a separate note, Dr Mendis reported that KB Financial Group of Kookmin Bank, the Republic of Korea's largest commercial bank, recently committed a mega-investment in the highly reputed and diversified LOLC Group, the Sri Lankan "Blue Chip" corporate.

OSL Take: The higher education sector in Sri Lanka is fast becoming a hotbed for foreign investments, given the potential for the development in the industry. Sri Lankan authorities are paying particular attention to the development of technical and vocational education in the country. There have also been many foreign universities that have opened up affiliate colleges in Sri Lanka targeting local as well as the regional student population. Foreign businesses/investors could, therefore, explore business/investment opportunities in Sri Lanka's higher education sector.

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Singapore, Sri Lanka affirms diplomatic relations with the Agri-Business and Digitalisation Webinar

A webinar on Monday (27 July) declared that the COVID-19 pandemic would build opportunities for Singapore and Sri Lanka to strengthen trade ties. Highlighted for particular emphasis were the trade ties with agri-business and digitalisation. Speaking at the webinar, the High Commissioner of Singapore for Sri Lanka, S. Chandra Das, spoke of new prospects given the fact that COVID-19 was "a very tiring time both (for) diplomatic and business cooperation."

"And as we begin to rebuild our economies and cultures, new ideas will start to multiply. COVID-19 (will) inspire us to re-envision possibilities and explore new opportunities, "he said. Chandra Das tallied: "Singapore and Sri Lanka have a long-standing commercial relationship, particularly (in) the food sector."

"Our import of Sri Lankan produce has evolved from cayenne spices to crabs, both in terms of quantity and variety," he said. The High Commissioner of Sri Lanka to Singapore, Sashikala Premawardhane, said food security was one of the regions in which the two nations could enhance cooperation.

"On the investment side we did very well between 2015 and 2019," she said, pointing out that Singapore was the fifth biggest investor in Sri Lanka. He added that about 100 Singaporean companies were working in Sri Lanka. "We see tremendous possibilities for the two nations to increase relations particularly in the fields of economics, commerce and investment, "she said.

COVID-19 emphasised the importance of keeping countries in contact at a time when borders were closed, and supply chains disrupted to ensure food security problems did not obstruct economic activity, she said. Locally, Singapore produces less than 10 per cent of its food needs.

The webinar on business opportunities took place on the 50th anniversary of diplomatic relations between Singapore and Sri Lanka. It touched particularly on areas such as digitalisation and agri-business. Chandra Das said: "The friendly relationships that we have enjoyed today between our two countries focused on historical events, including family bonds, long before our independence."

A declaration from the High Commission of Sri Lanka in Singapore noted that relations between the two countries date back to at least the 1800s, as both share the same ancient maritime trading routes. During the webinar, the topics discussed included company digitisation, food supply resilience in Singapore and food security.

According to the Sri Lankan High Commission, total bilateral trade last year was estimated at $883 million (S$ 1.21 billion) with Sri Lankan exports estimated at $115 million.

OSL Take: The Sri Lanka Investor Forum in Singapore and the many B2B meetings held are indicative of the potential for business/investments of local companies. The government of Sri Lanka is engaged in an investment drive along with the aggressive development programme that covers all critical economic sectors islandwide. Foreign businesses/investors could explore business/investment opportunities in Sri Lanka.

 VBS/AT/04082020/Z_TB4

Opportunities in the e-commerce sector as the base in Sri Lanka is increasing by 245 percent

"The COVID-19 lockdown has changed Sri Lankan customer habits as has the rest of the world," said Dr Rohantha Athukorala, Clootrack Sri Lanka, Maldives and Pakistan Country Leader, addressing the Metropolitan Rotary Club at The Hilton. Citing Kantar Sri Lanka's post-lockdown research study, the insight is that the e-consumer basket in Sri Lanka has increased from an $11 to $38. This lead was driven by e-payment, e-banking, online medical consultation and e-sports, which we see in Sri Lanka as the new lifestyle.

The underlying reason means the e-commerce eco-systems will have a significant post-COVID-19 change, and according to him, the private sector will have to change its business model.

"We also hear of a second wave of the deadly COVID-19 virus in China and Chennai, and clusters are also appearing in Sri Lanka, which means we have to prepare for a second wave," said Dr Athukorala.

Dr Athukorala also directs the COVID-19 Spread Rotary Stop for Sri Lanka.

"The decent news is that over two hundred firms are in the procedure of being approved by the Sri Lankan Standards Institute for a 'COVID-19 Control Environment' qualification, which means that the companies are putting up protections for a possible second wave that is cautious decision-making.

"Businesses like Akbar Brothers have gone on to place the company as the primary tea company globally certified as a 'COVID-19 Control Environment, which means that we in Sri Lanka are taking the high ground internationally, in a wise manner," opined Athukorala.

As the previous Chairman of Sri Lanka Export's Development Board and Sri Lanka Tourism, Dr Athukorala possesses the domain knowledge to back up that statement.

Recently, Anantaya Resorts and Spa announced to the world, that it is the first global hotel property to receive the 'COVID-19 Control Environment' certification that puts Sri Lanka on the global media.

The speaker went on to disclose the findings of the analysis of LMRB/Kantar. The results revealed that 13 per cent tried online education in Sri Lanka, 12 per cent tried live broadcasting via mobile media, 9 per cent tried online shopping, 8 per cent tried online shopping, 7 per cent paid their bills using smartphones. It also revealed a dramatic shift where 7 per cent conducted online religious activities.

"This is the current reality, and we in Sri Lanka need to improve based on this hard data so that we remain engaged with the Sri Lankan household," he said. Under the leadership of eminent business personality, Ruwan Jinasena, Metropolitan's Rotary Club is driving a critical project under the COVID-19 plan ‘Stop the Spread’, to certify the 'Tuk-tuk' community in Sri Lanka's urban markets, which is another first for Sri Lanka.

OSL Take: Sri Lanka showcases tremendous growth potential in the e-commerce arena, adding to an already diverse eco-system. There is growing interest in investment coming from many sources to Sri Lanka, and with a sustained support system, the Sri Lankan e-commerce will be able to compete internationally. Sri Lanka is currently engaged in a programme to transform the country into an e-economy. The government of Sri Lanka has introduced many programmes and provided many incentives to businesses involved in ICT to help develop the country's ICT and digital infrastructure sectors. All this has resulted in the expansion of business/investment opportunities in Sri Lanka's ICT and digital infrastructure sectors.

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India agrees with Sri Lanka on $400 million in currency swap

India's Reserve Bank has agreed to a $400 million currency swap facility for Sri Lanka until November 2022, tweeted on Friday by the Indian high commission. The development comes amid COVID-19 as a relief to Sri Lanka and will help in its post-pandemic economic recovery. A currency swap is a trade where two parties exchange interest and principal in separate currencies.

Currency swaps used to get foreign currency loans at a higher interest rate than can be provided by borrowing directly from an international market. The intervention of the RBI follows a recent bilateral 'technical dialogue' on rescheduling the outstanding debt repayment to India from Colombo.  A currency swap is a trade where two parties exchange interest and principal in separate currencies. Companies doing business overseas often use currency swaps to get loan rates in the local currency that are more attractive than if they borrow money from a local bank.

The Federation of Indian Chambers of Commerce and Industry (FICCI) in association with the Laxman Kadigamar Institute of Diplomatic Relations and Strategic Studies recently organised a webinar on 'Deepening Economic Collaboration between India and Sri Lanka.' Addressing the webinar, Sri Lankan Foreign Secretary Ravinatha Aryasinha said the neighbours could explore potential textile, IT and agribusiness collaborations, sectors in which India was 'powerful.'

Assuring that Sri Lanka will "facilitate, secure and foster a free environment for Indian investors," he invited Indian businesses in the production of industrial zones, automotive parts, pharmaceutical, textile and engineering activities. Ravinatha Aryasinha also speaking on Sri Lanka's exports, commented on market access difficulties, difficulties that were often created by non-tariff barriers in receiving countries. He said they were an impediment and urged FICCI to work with the Sri Lankan Mission in New Delhi to help improve Sri Lankan spice exports and concentrate on the Indian market.

Both countries are currently involved in rescheduling negotiations on debt repayments. The last round of the debate on Sri Lanka's rescheduling of bilateral debt repayment took place on July 22. The Indian mission, involving senior representatives from the Ministry of External Activities, Ministry of Finance, and EXIM Bank, interacted via a video conference with representatives from the Sri Lankan Department of External Resources.

A statement from the Sri Lankan Indian mission said, "The next round of technical discussions between the two sides on the debt repayment rescheduling is expected to take place soon”. On May 23, Sri Lankan President Gotabaya Rajapaksa spoke to Prime Minister Narendra Modi asking the former Indian government to provide USD 1.1 billion of individual swap facilities under the SAARC project amid the COVID pandemic to supplement USD 400 million.

OSL Take: Sri Lanka and India boast of strong bilateral and trade ties that have been further bolstered by the free trade agreement (FTA). Sri Lankan businesses are, therefore given preferential treatment when engaging in business ventures in India. Local companies could use this benefit to form joint ventures/partnerships with Indian companies. Foreign businesses/investors looking at doing business with India could explore the possibility of setting up base in Sri Lanka to reach out to the Indian market.

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