Colombo, April 9 (ECONOMYNEXT) – ”We requested the Indian government to increase the quota to 50 million pieces because this agreement was signed 25 years ago, and now the market has expanded. If not, we have requested facilities to increase exports by 500 million dollars,” Foreign Minister Vijitha Herath said.
Colombo, April 8/ECONOMYNEXT – Sri Lanka has requested India to expand the quota to export under the Indo-Lanka Free Trade Agreement to 50 million units from the current 8 million after President Donald Trump slapped a 44 percent tax on the island, Foreign Minister Vjitha Herath said.
“From the reciprocal tax imposed by America there is an impact on our exports,” Minister Herath told parliament Tuesday.
“With that we had discussions with India. Under the (Indo Lanka) Free Trade Agreement, we had a quantity of 8 million pieces. We are fully utilizing it.
“We requested the Indian government to increase the quota to 50 million pieces because this agreement was signed 25 years ago, and now the market has expanded.
“If not, we have requested facilities to increase exports by 500 million dollars.”
India was slapped a 27 percent tax under the formula used by Donald Trump which was based on the trade deficit divided by the imports to the US, which is claimed to represent tariff and non-tariff barriers imposed by Sri Lanka.
Compared to Sri Lanka 44 percent, India has a substantial advantage in exporting to the US. Several Sri Lankan firms also operated out of India exporting to the rest of the world.
President Trump is trying to create a Sri Lanka style protectionist utopia, in a deeply Mercantilist belief that trade deficits are bad.
The US has not counted services imported from America in the calculation. The EU is planning to hit back on US services.
