TDAP lists 2,200 products for potential exports to Sri Lanka

KARACHI: The Trade Development Authority of Pakistan (TDAP) has prepared a list of 2,217 items for exports under the facility of Free Trade Agreement (FTA) with Sri Lanka.

These items have potential to be exported to Sri Lanka having zero percent Customs duty agreed under the free market access to Sri Lanka, Rabiya Javeri Agha, secretary of the TDAP, said this week, while talking to The News.

She is now in Colombo, Sri Lanka to attend a three-day Pakistan Single Country Exhibition starting from January 15. The two countries despite having FTA since 2005 are unable to explore the opportunities.

According to Commerce Ministry, the trade agreement between the two countries is operational from June 12, 2005, under which Pakistan and Sri Lanka agreed to offer preferential market access to each others' exports by way of granting tariff concessions.

According to Pakistan Bureau of Statistics (PBS), Pakistan's exports to Sri Lanka amounted to $267 million as compared to $58 million imports from Sri Lanka in 2014/15.

Of the $267 million worth of exports to Sri Lanka in the fiscal year under review, $89 million, or 33 percent, constituted only cotton cloth – a traditional Pakistani export item.

The second and third top exported items to Sri Lanka were cement $37 million and pharmaceuticals $20 million. Other products included vegetables, rice, value-added textiles, bedwear and other commodities.

Javeri said that despite trade concessions Pakistan had only utilised 29 percent of the facility.

The TDAP is also encouraging auto assemblers to explore Sri Lankan market as 33 industry-related items have been given zero-rated market access under the FTA.

Sri Lanka has strict policy regarding automotives. Most of the exports of other countries under the most favoured nations (MFN) Status to Sri Lanka are subject to Customs duty ranging 7.5 percent to 25 percent on such items falling under auto industry.

The TDAP also identified around 25 items, which have potential to export to Sri Lanka, as the country is importing from other destinations.

The authority identified that the exports of instruments and appliances used in medical or veterinary sciences having zero percent Customs duty to Sri Lanka and is around $322,000.

In contrast, Sri Lankan imports of such items are around $44.82 million from other economies, while Pakistan's exports of similar items to global markets stood at $319.52 million.

In these 25 products, the engineering sector has also potential where Sri Lanka imports and Pakistan exports.

Industry sources; however, highlighted the challenges in exporting to Sri Lanka, as the same preference of FTA has been given under Sri Lanka–India FTA.

They said that due to lower prices Indian products have competitive edge in Sri Lanka.