India and Sri Lanka are revisiting their long-standing trade relationship to expand beyond traditional goods tariffs, with discussions focusing on services, investment, technology, and regional economic integration.
India and Sri Lanka are revisiting a trade relationship that has been in place for more than two decades, as both governments look to broaden an agreement that was originally designed to remove tariffs on goods. The India–Sri Lanka Free Trade Agreement entered into force in March 2000 after being signed in December 1998, according to the agreement text and the International Energy Agency’s policy overview. Its original scope was limited largely to merchandise trade, with both sides keeping sensitive items on negative lists.
The current push is aimed at moving beyond that narrow framework. Reporting in the Financial Times of Colombo says Sri Lankan policymakers and business leaders want deeper cooperation in investment, technology, logistics and digital trade, while government officials have said they are reviewing existing trade pacts to better support economic growth. Vijitha Herath, Sri Lanka’s foreign affairs minister, said in comments reported by the newspaper that Colombo has not signed or implemented the proposed Economic and Technology Cooperation Agreement, but is seeking to update and expand the existing free trade arrangement first.
That broader agenda reflects the shift in trade policy now under discussion. The Falcon Freight summary says the newer framework would extend into services such as information technology, maritime logistics and financial services, alongside investment protection rules and digital customs processes intended to reduce costs for smaller businesses. The U.S. International Trade Administration’s country guide also notes that Sri Lanka’s trade strategy increasingly links bilateral deals with wider regional ambitions, including interest in the Regional Comprehensive Economic Partnership.
Talks on the India–Sri Lanka Economic and Technology Cooperation Agreement have been under way for years. The India Brand Equity Foundation says negotiations began in 2015 and that 14 rounds had been completed by July 2024. Even so, the latest emphasis appears to be on modernising the existing goods pact first, rather than rushing into a wider accord, as both sides seek a framework that better matches today’s supply chains and regulatory demands.
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