India and Sri Lanka are set to sign the Comprehensive Economic Partnership Agreement (CEPA) when the heads of the two governments meet during the coming SAARC summit, a top Indian bureaucrat confirmed on Wednesday.
The text of the agreement — which is only the second such agreement India would sign after the one with Singapore — has been frozen and Prime Minister Manmohan Singh and President Mahinda Rajapaksa would ink it on the sidelines of the summit on August 1, India’s commerce secretary Gopal K Pillai said. “India has emerged as the largest and most balanced trade partner of Sri Lanka and
CEPA would be implemented in a phased manner over the next three years,” Pillai said. He added the CEPA would focus on services and investments and take forward the Free Trade Agreement which the two countries had signed in 2000 and which dealt with only trade in goods.
“Twelve rounds of technical-level negotiations have been held on CEPA starting February 2005,” Dr Saman Kelegama, part of the CEPA joint study group and executive director of the Institute of Policy Studies in Sri Lanka, told HT.
According to the Confederation of Indian Industry (CII), before the agreement, the trade between the two countries was $500. By 2007, it had already jumped to $2.5 billion and is expected to double by 2010. Bulk of the exports to Sri Lanka includes petroleum products and transport equipments (almost 50 per cent), while primary and semi-finished iron and steel is also a fast growing export item.