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FTA stimulated FDI in India, Lanka: UNCTAD
PTI - New Delhi
Indo-Sri Lankan free trade agreement (FTA) of 1998
has stimulated foreign direct investment in a number of sectors apart from increasing
exports and imports, a United Nations report said.
"Although the agreement does not address investment,
it has stimulated new FDI in a number of areas," the World Investment Report
of 2003 released by UNCTAD here said. After the agreement, 37 projects are now
in operation, with a total investment of US$ 145 million, it said.
India and Sri Lanka signed the agreement in 1998, which
offers duty-free market access on a preferential basis. Covering 4,000 products,
it foresaw a gradual reduction of import tariffs. The effect of the agreement
was that India’s export to the island nation increased to US$ 831 million
in 2002 from US$ 604 million in 2001, UNCTAD said. Sri Lanka’s exports
to India rose to US$ 168 million in 2002 from US$ 71 million in 2001, it added.
Referring to the Indo-Sri Lanka and ASEAN free trade
agreement, UNCTAD said such free trade agreements have influenced MNCs to invest
more in those regions.
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