## 📈 Renewed India-SL Trade Pact to Drive Export Surge

A modern trade framework with India is essential to transition Sri Lanka from a 20th-century product mix to a strategic player in global supply chains. While India is the largest trading partner, a significant trade imbalance persists, necessitating a shift toward high-value industrial investments. • Key Trade Figures Over 60% of current exports to India utilize the India-Sri Lanka Free Trade Agreement (ISFTA). Despite this, a massive gap exists: Vietnam exports more to China in one week than Sri Lanka does to China in five years, highlighting the urgent need for supply chain integration. • Strategic Sector Opportunities Manufacturing & Electronics: Potential to move beyond assembly to supplying insulated wires, cables, and rubber components as intermediate goods for Indian industry. Spices & Agri-products: While traditional exports remain a staple, the focus must shift to non-traditional, higher-value manufactured goods. ICT/BPM & Services: A renewed Economic and Technology Cooperation Agreement (ETCA) aims to open doors for service-led growth and technology transfer. • Economic Impact & Barriers FDI Attraction: Preferential access to India’s 1.4 billion market makes Sri Lanka a competitive base for export-oriented foreign investment, boosting employment. Regulatory Hurdles: Current growth is limited by narrow product concessions, restrictive tariff quotas, and extensive negative lists. Value Addition: Existing rules require a minimum of 25% Domestic Value Addition (DVA) to qualify for preferential tariffs, providing a baseline for deeper industrial integration.