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Exports under the FTA

During the 9 months after the implementation of Indo-Lanka FTA (April - December, 2000), Sri Lanka has achieved an overall 33% growth in exports to India of which 71% (Rs.640 mn.) accounts for items exported under the FTA. Some of the new products entered into Indian market under FTA includes value added tea, sausages, biscuits, chocolates, ceramics, furniture, metal products, footwear, wooden toys, memory chips, machinery & mechanical appliances and herbal products

Entry to Indian Market

Company
Sector
Ceylon Chocolates (Pvt) ltd. Chocolate (Kanbar)
Edna Chocolates Chocolates
Maliban Biscuits
Prima Processed Food
Keels Processed Food
Mlesna Branded Tea
DSI Rubber Slippers / Rubber Products
Gloves Lanka (Pvt) Ltd. Knitted Gloves
Lanka Walltiles Ceramic Walltiles
Damro Furniture
Eclar Toys Wooden Toys
Tandon Associated Lanka (Pvt) Ltd. Dual inline memory modules
Skyspan Asia (Pvt) Ltd. Substitute to conventional roofing systems
Tantri Trailers Trailers / long vehicles
Link Natural Ayurvedic Medicines


Imports under the FTA

For the same period under the review, the total value of imports to Sri Lanka (from India) accounted for Rs.36,485 mn. of which 8% (Rs. 2,962 mn.) under FTA. The major products imported includes

Inorganic & organic chemicals - Raw materials
Electrical machinery & equipment - Capital goods
Iron, steel, cement, vehicle parts - Intermediate products
Plastic items - Finished products


Investment under the FTA:

The BOI has initiated 41 projects with the benefits granted under the FTA pledging investments to the value of Rs. 8,900 (US$ 100 mn). Six projects have already signed the agreement of which one project has commenced commercial operation and two are being constructed. Another four projects are at pending for the approval while the balance 31 projects are in various stages of negotiations

A summary of projects initiated under the FTA (as at 1st May, 2001)

Project Status
No. of Projects
Estimated
Sector**
Investment (SL Rs. Mn.)
Employment (No)
Commercial Operation
1
40
20
Light Engineering
Under Construction
2
2,000
200
Light EngineeringWooden Products
Approved
3
1,750
270
ChemicalLight Engineering
Pending Approval
4
288
270
Light Engineering
Projects under negotiation
31
4,800
1,500
Light Engineering/Garments/ Chemical/Plastics/Herbal Products/Electric/Wooden Products/Paper Products etc.

** The products include MDF Board, Stainless steel water tanks, Metal Ingots, hot Water Showers, Milking Machines, Copper alloy ingots, Coolers, Freezing cabinets, Wooden & Steel furniture, Enamel wire, Copper wire, Soap, Low voltage automatic circuit breakers, Synthetic Gloves, Poultry feed, Compressors for refrigerators, Glaze tiles, paper sacks etc.

Distribution of projects under the FTA according to the project status (as at 1st May 2001)



Projects in Commercial Operation

1. SMS metals (Stainless Steel Water Tanks Manufacturers)
SMS Metals, a joint venture between Sri Lanka and Malaysia is a pioneering project which has already commenced commercial operation targeting the Indian market in particular. in Sri Lanka under Indo - Lanka FTA. The Project with an estimated investment of Rs. 40 mn. forecasts an annual export sales of Rs. 7.2 mn. into the Indian market.

Projects Under Construction

1. Merbok Hilir Berhad
Asia's largest manufacturer of Medium Density Fibre (MDF) board, Merbok Hilir Berhad is setting up a MDF factory in a 20-acre plot in one of the newly built EPZ with an investment of US $ 20 mn. The production process is due to commence during the end of the year using rubberwood as the major raw material. The product will be exported mainly to the Indian market.

2. Raymet Indo-Lanka (Pvt) Ltd. (Steel Marketing)
Steel marketing is another joint venture initiated under Indo - Lanka FTA. The Project with an estimated investment of Rs 200 million has started its factory construction in the Horana EPZ.

Approved Projects

1. Indian Rayon
2. Singhal Commodities Ltd.
3. I-E Technics


Source: Borad of Investments (BOI) - Sri Lanka

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