India-Sri Lanka Free Trade Agreement Negative List: What You Need to Know
The India-Sri Lanka Free Trade Agreement (ISFTA) was signed in 1998 with the aim of boosting economic cooperation between the two countries. The agreement eliminated tariffs on a wide range of goods, creating a favorable environment for trade. However, there are certain items that are not included in the agreement and are subject to a negative list. This article will discuss what the negative list is and its implications for businesses trading between India and Sri Lanka.
What is the Negative List?
The negative list is a list of items that are not covered by the ISFTA and are subject to tariffs. These items can include products, services, and investments. The list is periodically reviewed and updated by both countries.
What Items are on the Negative List?
The negative list for the ISFTA covers a wide range of products, including agricultural produce, textiles, and certain chemicals. In addition, certain services, such as banking and insurance, are also included in the negative list. The list is periodically reviewed and updated by both countries.
What are the Implications for Businesses?
The negative list can have both positive and negative implications for businesses trading between India and Sri Lanka. On the positive side, the ISFTA has eliminated tariffs on a wide range of goods, making it easier and cheaper for businesses to trade between the two countries. By eliminating tariffs on most goods, the ISFTA has made it easier for businesses in both countries to compete in each other`s markets.
However, the negative list can create some challenges for certain businesses. For example, if a business deals in an item on the negative list, they will need to pay tariffs to import or export the product. This can add to the cost of doing business and make it more difficult to compete in the marketplace. Additionally, businesses that provide services on the negative list, such as banking or insurance, may face restrictions that limit their ability to operate in the other country.
Conclusion
The India-Sri Lanka Free Trade Agreement has been a boon for businesses in both countries, eliminating tariffs on most goods and creating a favorable environment for trade. However, the negative list can create some challenges for businesses that deal in certain products or services. It is important for businesses to be aware of the items on the negative list and how they may affect their operations. By understanding the implications of the negative list, businesses can better navigate the trade relationship between India and Sri Lanka.