(Bloomberg) -- Sri Lanka will “redouble” efforts to strike a free trade deal with China and conclude and expanded trade pact with India as part of the island nation’s strategy of becoming an Indian Ocean hub for investors and multinationals, the country’s top diplomat says.
Colombo inked a comprehensive free trade deal with Singapore in January and now has the bandwidth to finalize deals with Sri Lanka’s two largest trading partners “as quickly as possible,” said foreign secretary Prasad Kariyawasam in an interview.
“Since we have now done the trade deal with Singapore, we can redouble our efforts to finalize an expanded trade deal with India and China,” said Kariyawasam, the country’s former ambassador to the U.S. and top envoy to India.
In recent years, Sri Lanka -- which emerged from a three-decade civil war in 2009 -- has been known for taking Chinese loans to fund vast infrastructure projects, including ports and highways.
But Kariyawasam, speaking from his office in Colombo, said the projects are geared toward welcoming not just Chinese but Indian and other international companies and investors. The city’s developers hope people will make Colombo a regional base. A large, Chinese-orchestrated land reclamation project not far from his office will have luxury accommodation, international schools and a marina. It’s being marketed as a “world class city for South Asia.”
Negotiating deals with India and China won’t be easy.
New Delhi has dragged out trade deals before and Sri Lanka’s population is wary of Asia’s two most populous nations swamping this country of around 21 million people -- roughly the population of New Delhi -- with goods, services and professionals. Still, a Sri Lankan finance ministry official told Bloomberg News a deal with India could happen in about a year’s time.
“We are working hard to do those deals as quickly as possible, because that will benefit our trade, business and investment,” Kariyawasam said, adding that the country will also need to evolve its regulatory environment.
“Sri Lanka’s goal is to be a hub for the Indian Ocean.”
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