📈 India Pushes Upgrade of Free Trade Agreement with Sri Lanka

India has signaled readiness to fast-track an upgrade of the 26-year-old India-Sri Lanka Free Trade Agreement (ISFTA), aiming to expand bilateral trade, services, and investments during Sri Lanka's economic recovery. • Overall Impact: Sri Lankan exports to India grew from ~$50 Mn in 2000 to over US$ 1 Bn in 2025 under the current goods-only ISFTA. A newly appointed Sri Lankan task force is currently reviewing the enhancement. • Key Priorities: The upgraded pact focuses on removing non-tariff barriers, strengthening rules of origin (similar to India-US/Canada lines), and incorporating trade in services without targeting specific Sri Lankan sectors. • Strategic Value: The move aligns with a proposed Sri Lanka-India-Japan economic corridor. A study estimates this export-oriented industrial corridor could boost Sri Lanka’s economic growth by up to 9.3% by 2030, positioning the island as a key logistics hub. • Context: This follows previous stalled integration efforts like CEPA (2008) and ETCA. Analysts note the upgrade could secure vital market access and attract export-oriented investments, provided local competitiveness concerns are addressed.