India and Sri Lanka: ETCA Paves Way for Deeper Economic Ties and Island Export Boom

Celebrating India’s 75th Republic Day, Indian High Commissioner Santosh Jha unveiled exciting news for Sri Lanka – the imminent finalization of the Economic and Technology Cooperation Agreement (ETCA). This agreement, he declared, “promises to be a game-changer,” paving the way for a significant boost to the island nation’s export potential.

Mr. Jha’s optimism echoes past successes. He reminded the audience that the existing Free Trade Agreement (FTA) has already opened doors, with Sri Lankan exports to India exceeding $1 billion. The ETCA, he said, aims to build upon this foundation, “enhancing our economic partnership and propelling Sri Lanka’s export potential even higher.”

But the partnership between India and Sri Lanka extends far beyond trade. Mr. Jha emphasized the “Security and Growth for All in the Region (SAGAR)” policy, placing regional development at the heart of India’s approach. “Our ties are built on strong civilizational bonds, geographical proximity, cultural harmony, and a deep sense of solidarity,” he affirmed, highlighting the “age-old goodwill” that characterizes the relationship.

This goodwill translates into tangible collaborations. Mr. Jha pointed to several concrete examples, showcasing the nations’ dedication to fostering closer connectivity. Since July 2023, daily flights between Jaffna and Chennai have taken off, while a ferry service has bridged the physical gap. Beyond transportation, ambitious energy projects are in the pipeline, including power grid interconnection, a petroleum pipeline to develop Trincomalee as an economic hub, and a virtual LNG pipeline bringing down electricity costs in Sri Lanka.

The economic partnership doesn’t stop there. India remains Sri Lanka’s largest trading partner, with bilateral trade reaching a staggering USD 6 billion in 2022. It’s also the island’s top source of foreign investment and tourists, demonstrating the multifaceted nature of their ties.

Mr. Jha further underscored India’s unwavering commitment to development projects across the island. “Over 5 billion US dollars have been poured into projects touching every single district of Sri Lanka,” he announced, citing solar electrification, railway modernization, housing for the poor, healthcare and education infrastructure upgrades, and port and airport development as key areas of focus.

Looking ahead, the future shines bright for Sri Lanka and India. Mr. Jha highlighted areas like the Sri Lanka-Unique Digital Identity project and UPI integration, reflecting a shared vision for the future. He concluded by reiterating the profound bond between the two nations: “We are irreplaceable, indispensable, and inseparable as partners. Our interests in security and development are intertwined and interlinked.”

As Sri Lanka and India move towards finalizing the ETCA and expanding their collaboration, the prospect of a flourishing, mutually beneficial partnership becomes increasingly vivid. With a shared commitment to growth, connectivity, and development, the two nations stand poised to embark on a new chapter of their long-standing friendship, with far-reaching benefits for both.