Lankan minister says FTA with Pakistan yet to tap full potential

KARACHI: Sri Lankan Minister of Trade Dr Bandula Gunawardhane on Thursday said Pakistan Sri Lanka Free Trade Agreement (PSFTA) has moderately enhanced bilateral trade volume, but the real potential still needed to be achieved by both countries.

Dr Gunawardhane visited the Karachi Chamber of Commerce and Industry (KCCI) office with a Sri Lankan delegation, where he also said that in 2020, despite the debilitating impact of the Covid-19 pandemic on all businesses, Sri Lanka’s total exports to Pakistan reached $74 million, of which $53 million worth of exports or 73 percent took place under PSFTA.

The Sri Lankan trade minister said that Pakistan was the only market for Sri Lankan betel leaves, which was mostly associated with the income of the rural population of Sri Lanka. “We are hopeful that Pakistani government will soon do away with the regulatory duty which adversely impacted the export of betel leaves from Sri Lanka,” he added.

On the trade front, Pakistan has been a long-standing partner and a close ally of Sri Lanka. In mid-70s, Pakistan was the largest buyer of Sri Lanka, accounting for 8 percent of total exports due to high intake of Ceylon tea. Today, Pakistan was the second largest trading partner of Sri Lanka in the SAARC region.

He hoped that the business visit of Sri Lankan delegation would pave the way for trade, investment and tourism.

Businessmen Group Chairman Zubair Motiwala requested the Pakistani and Sri Lankan government to sit together and revisit the FTA as soon as possible, to benefit from the existing trade potential of around $2.5 to $3 billion. He also spoke about Pakistani goods replacing Indian goods in the Sri Lankan market.

He requested the Sri Lankan trade minister to convince his government to revisit the investment policy announced recently, which would certainly create a win-win situation for both the countries.

“Sri Lanka possesses huge raw material for paper industry, hence relevant Pakistani businessmen can set up their paper industries in Sri Lanka, but they must be provided single window facility,” BMG chairman said, while asking the Sri Lankan experts and businessmen in gems cutting and polishing to explore opportunities in Pakistan.

“We will also guide you to Afghanistan where there is a huge potential for the gem stones industry,” he added.

Suggestion to improve air and sea linkages was also given to promote tourism and to enable frequent visits of business delegations between the two countries.

Earlier, while welcoming the Sri Lankan delegation, KCCI President Muhammad Idrees said in 2020, Pakistan’s exports to Sri Lanka totalled $324.7 million, while the imports from Sri Lanka were recorded at $78.9 million.

Pakistan has a huge market for spices, which Sri Lankan exporters should explore. In 2020, Pakistan imported $9.91 million worth of cloves from other countries whereas, Sri Lanka exported around $15.87 million worth of the commodity to other countries. Trade in this particular commodity does not exist between Pakistan and Sri Lanka.

He also stressed that Sri Lanka should look into importing pharmaceutical products from Pakistan. During 2020, Sri Lanka imported medicaments consisting of two or more constituents worth around $2.14 million from countries excluding Pakistan, while Pakistan exported $9.70 million worth of the commodity.

Idrees urged businessmen and investors to capitalise on the opportunities in agriculture, textile, tourism, real estate, energy and IT sectors. He also invited Sri Lanka to participate in My Karachi Exhibition scheduled to be organised at Karachi Expo Centre from February 11 to February 13, 2022.