Signing of a Free Trade Agreement (FTA) can help Bangladesh and Sri Lanka narrow the trade imbalance, a diplomat of the island nation has said.
"FTA is an effective means through which we can increase bilateral trade. This can also help reduce the trade gap between the two countries," acting High Commissioner of Sri Lanka A G Abeysekara told the FF on the sidelines of a business match-making meeting in the city recently.
He also laid emphasis on strengthening regular contacts between businessmen of the two countries.
The acting envoy said the direct maritime connectivity between the ports of the two South Asian economies will surely boost bilateral trade.
He stressed the need for increasing trade and investment between the two friendly countries for their mutual benefits.
The bulk of the Sri Lankan foreign direct investment (FDI) in Bangladesh is in the readymade garment sector while the largest Bangladeshi FDI in Sri Lanka is in the pharmaceuticals sector.
Sri Lankan FDI in Bangladesh is nearly US$ 300 million while Bangladeshi FDI in Sri Lanka is $ 20 million. Over 45 companies of Sri Lanka are doing businesses in Bangladesh while six companies of Bangladesh are doing the same in Sri Lanka.
Mr Abeysekara said his government has already sent their consent to the government of Bangladesh for exporting 50,000 tonnes of boiled rice.
He said that rice export from Bangladesh to Sri Lanka will further strengthen the bilateral relations that will also help boost mutual trade.
He said Sri Lanka is already importing pharmaceutical items from Bangladesh through the government channel.
He urged Bangladeshi private entrepreneurs to export more pharmaceutical items to Sri Lanka. He invited Bangladeshi entrepreneurs to invest in the pharmaceutical sector in Sri Lanka.
The Sri Lankan diplomat expressed the hope that the volume of two-way trade would increase significantly within the next few years considering the business potential of the two countries.
He said some Sri Lankan companies have expressed interests to investment in the Information Technology (IT), education and apparel sectors in Bangladesh.
The current level of bilateral trade between Bangladesh and Sri Lanka is far from being satisfactory and it still remains at a very low level.
Bangladesh imported goods from Sri Lanka worth US$ 39.6 million as against its exports worth only $ 23.69 million during the fiscal year (FY) 2012-13.
Sri Lankan's major export items to Bangladesh include apparel (cotton, fabrics, narrow woven fabrics and other articles of apparel) and enzymes. Bangladesh mainly exports medicine, apparel, electric accumulators and potato to Sri Lanka.
Since the establishment of diplomatic relations in 1972, the two countries have so far signed different agreements that include: General Trade Agreement in February in 1972, Economic and Technical Cooperation Agreement on 6th November 1979, Shipping Agreement on 7th November 1979, Avoidance of Double Taxation Agreement on 19th December 1992, Air Service Commercial Agreement on 19th December 1992, Joint Commission for Economic Cooperation in February 1985 and Cultural Agreement on 29th June 1979.
He said FTA signing would be a milestone to the historical relations of Bangladesh and Sri Lanka.
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