India on Wednesday gave important trade concessions to Sri Lanka, in an apparent attempt to assure the latter that New Delhi would be friendly to it despite the strain put on bilateral ties by the on-going events in Tamil Nadu.

In August 2012, Indian Commerce Minister Anand Sharma had assured Sri Lanka that India would do away with the stipulation that the Lankan garment industry must, to a given extent, use fabric sourced from India if it wanted to avail of zero duty concession for export to India under the India-Sri Lanka Free Trade Agreement (ISLFTA).

Under the ISLFTA, at least 5 million of the 8 million pieces allowed to be exported to India duty free, should have been made with Indian fabrics.

But the Lankan government wanted this condition lifted, because the island’s garment industry was finding it difficult to meet the requirement. India, which had been delaying the implementation of Sharma’s promise for almost a year, has now thought it fit to give in. Now, Lanka can export to India, the entire quota of 8 million pieces, without using fabrics imported from India.

Additionally, India has notified duty concessions for non-LDC countries under the South Asian Free Trade Agreement (SAFTA).

Under the notification, Lankan textile exports to India, under SAFTA, would attract 5 per cent duty, and not 11 per cent, as had been the case so far. (New Indian Express)