The Indo-Sri Lanka Free Trade Agreement (ISFTA), which was signed on 28th December 1998 and entered into force with effect from 1 March 2000, provides duty free concessions to a wide range of products traded between India and Sri Lanka. India’s final tariff liberalization commitment under ISFTA came into effect in March 2003, opening duty free access to 2,024 products for Sri Lanka, and Sri Lanka’s final tariff liberalization came in March 2008 when India became eligible to export 4,233 products to Sri Lanka duty free67.
Pakistan - Sri Lanka Free Trade Agreement (PSFTA) came into force on 12 June 2005. Pakistan implemented its final phasing out commitment in June 2008, and Sri Lanka has now duty free market access for more than 4,500 products. Sri Lanka has also completed all its phasing out commitments in November 201068.
The treaty between the US and Sri Lanka came into force on 1 May 1993, which aims to promote the investment of the two countries by ensuring fair and equitable treatment and protection of investment made by the US and Sri Lanka entities, in accordance with the relevant domestics laws of the two countries.
The Agreement on SAARC Preferential Trading Arrangement (SAPTA) which envisages the creation of a Preferential Trading Area among the seven member states of the SAARC, namely Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka was signed in Dhaka in April 1993.The objective of the SAPTA is to promote and sustain mutual trade and the economic co-operation among the member states through exchange of trade concessions. SAPTA therefore is the first step towards higher levels of trade and economic co-operation in the region69.
The Asia-Pacific Trade Agreement (APTA), formerly known as Bangkok Agreement was signed on 2nd November 2005 and it came into force on 1 September 2006.The APTA member countries consist of Bangladesh, China, India, Laos, South Korea, Sri Lanka, and Mongolia, which cover a total population of about 2.5 billion, a vast potential market, increasing the level of intra-regional trade flows among the participating states70.
Sri Lanka and India are working towards finalizing the Economic and Technology Cooperation Agreement (ETCA) by the end of 2016. Unlike other trade agreements which cover goods, the agreement covers services, in particular, IT and shipyards services. The objectives of this agreement are mentioned below.
(i).To strengthen and advanced the economic, trade, investment and technology cooperation between India and Sri Lanka.
(ii). To promote further liberalization of trade in goods, and services between the two countries, and gradually establish fair, transparent and facilitative trading, investment and investment protection mechanism.
(iii). To expand areas of economic corporation and establish a corporation mechanism
Singapore and Sri Lanka officially launched negotiations for a FTA by the respective trade ministers on 18th July 2016. Singapore and Sri Lanka officially launched negotiations for a FTA by the respective trade ministers on 18th July 201671. The FTA will provide Sri Lanka duty free access to Singapore’s market and vice versa for almost all goods, which could expand the mutual trade volume from the current level to over US$ 1 bn72. Moreover, Singapore is an important member of ASEAN with a high trade to GDP ratio. More importantly, a FTA with Singapore will provide Sri Lanka a gateway to larger ASEAN market given that many of the region’s companies are headquartered in Singapore. In addition, the agreement may lead to an increase in foreign direct investment from Singapore, which is the fourth largest investor in Sri Lanka. It is also worth noting that, in 2014, US$ 102 million worth of Singaporean FDI came into the country73.