The debate around the Indo-Lanka Free Trade Agreement (ILFTA) reignited in Parliament, with National Democratic Front (NDF) MP Ravi Karunanayake highlighting a significant trade imbalance heavily favoring India, despite the agreement being in force for 25 years. Karunanayake pointed to 2024 figures showing Sri Lanka's exports to India at only USD 884 million versus imports of USD 3.76 billion, arguing the FTA is now outdated and hampered by non-tariff barriers (NTBs). He advocates for the proposed Economic and Technology Cooperation Agreement (ETCA) as the necessary solution to align Sri Lanka with India's rising global economic power.A Critical Perspective
While Karunanayake correctly identifies the persistent trade gap, his presentation risks oversimplifying a complex issue. The trade deficit is not solely a failure of the FTA structure; it is largely a reflection of Sri Lanka's structural deficiencies in industrial capacity, export diversification, and supply-side competitiveness. Shifting focus entirely to the Economic and Technology Cooperation Agreement (ETCA) as a silver bullet, without addressing these fundamental domestic weaknesses, may only perpetuate the reliance on an external agreement to solve internal problems. The critical challenge is for Sri Lanka to aggressively utilize its existing market access by enhancing its export infrastructure and production quality, rather than waiting for a new treaty to automatically bridge the gap. [‘Hari Deshaya’]
"The following is the statement made by MP Ravi Karunanayake in Parliament regarding the Indo-Lanka FTA, as reported by the Daily Mirror."Colombo, Nov 8. (Daily Mirror News report) –
The Indo-Lanka bilateral trade volume has grown exponentially, but Sri Lanka appears to be a loser with a trade gap heavily in favour of India, Parliament was informed today.
Raising a question under Standing Order 27 (2), National Democratic Front (NDF) MP Ravi Karunanayake said that the Free Trade Agreement between the two countries entered into force 25 years ago and that both sides completed tariff liberalisation by 2008.
He said Sri Lanka’s exports to the Indian market amounted to only USD 884 million last year, whereas imports stood at USD 3.76 billion during the period.
Asserting that the FTA is now outdated and non-tariff barriers stand in the way of realising the full potential of trade, he said the proposed Economic and Technology Cooperation Agreement (ETCA) is the solution. He recalled that India had asked for the appointment of a chief negotiator to resume talks on ETCA.
“We cannot ignore the global context. India is well on track to become the world’s third largest economy by 2027. As transformation unfolds, Sri Lanka should position itself as a partner, influencer and facilitator in India’s supply chains, logistics corridors and services integration,” he said.
He asked the government to declare its position in this regard.
Trade Minister Wasantha Samarasinghe said he will provide his answer in a week.