India-Sri Lanka FTA
Letters of Exchange (2nd February, 2000)
COMMERCE SECRETARY
GOVERNMENT OF INDIA
NEW DELHI-110011
February 2, 2000
Dear Dr. Jayasundera,
Pursuant to Article XVI of the Free Trade Agreement
between the Republic of India and the Democratic
Socialist Republic of Sri Lanka, signed in New Delhi on
28th December 1998, and the agreement reached in
subsequent discussions between the two Governments to
continue negotiations on the Annexures to be finalised,
notwithstanding the time-frame stipulated in the
aforesaid Article, we have finalised and exchanged today
the following Annexures which shall form an integral
part of the Agreement:
(i) Annexure D(i)
Negative List of India
(ii) Annexure D(ii)
Negative List of Sri
Lanka
(iii) Annexure E
Items on which India has
undertaken to give 100% tariff concession on coming into
force of the Agreement.
(iv) Annexure F(I)
Items on which Sri Lanka
has undertaken to given 100% tariff concession on coming
into force of the Agreement.
(v) Annexure F(II)
Items on which Sri Lanka
shall give a 50% margin of preference upon coming into
force of the Agreement, with the margin subsequently
being deepened to 70%, 90% and 100%, respectively, at
the end of the first, second and third year of the entry
into force of the Agreement.
(vi) Annexure A Para 1(b)
Items in Chapters 51 to
56, 58 to 60 and 63 of the ITC-HS Code on which India
has undertaken to give 25% tariff concession on coming
into force of the Agreement.
-
Pursuant to discussion
between our two governments, the items related to
tea are not in India's Negative List. However,
import of tea from Sri Lanka to India on a
preferential basis shall be subject to an annual
maximum quota of upto 15 million Kg. on a fixed
tariff concession of 50%.
-
Further, in the interest of
expansion and diversification of Sri Lanka's exports
to India, garments under ITC-HS Chapters 61 and 62,
while remaining in the Negative List {Annexure D(I)},
will be given 50% tariff concession on a fixed basis
by the Government of India subject to an annual
restriction of eight million pieces, of which six
million pieces shall be extended the concession only
if made of Indian fabric, provided that no category
of garments shall exceed one and a half million
pieces per annum.
-
Also, pursuant to the
discussion between our two governments, two items
relating to cement (ITC-HS Codes 2523.21 and
2523.29) will remain on Sri Lanka's Negative List
for the time being. The tariffs on these items would
nevertheless be reduced progressively in such a
manner, so that at the end of eight years from the
date of entry into force of the Agreement, the items
shall attract no duty and shall be phased out of the
Negative List. It is noted that the present regime
of there being no restrictions on the import of
Indian cement into Sri Lanka would continue to be in
effect.
-
These understandings shall
be deemed to be a part of the Agreement and shall
enter into effect on the coming into force of the
Agreement.
-
It is also agreed that the
Agreement will be notified to the WTO under the
Enabling Clause (Decision of 28th November, 1979)
which allows for such arrangements to be entered
into among developing countries. We may decide on
the timing of the notification to WTO after the
Agreement enters into force.
-
I shall be grateful for an
acknowledgement of this letter by the Government of
the Democratic Socialist Republic of Sri Lanka. This
letter and your acknowledgement thereto shall
complete the process of finalisation of Annexures
under Article XVI of the Agreement.
Yours sincerely,
P.P. Prabhu
Dr. P.B. Jayasundera
Secretary
Ministry of Finance & Planning & Secretary to
the Treasury
Government of the Democratic Socialist Republic of Sri
Lanka
Colombo.
MINISTRY OF FINANCE AND PLANNING
The Secretariat, Colombo 01
February 2, 2000
Dear Shri Prabhu,
I have the honour to acknowledge the receipt of your
letter of 2nd February, 2000 which reads as follows :
Quote :
Dear Dr. Jayasundera,
Pursuant to Article XVI of the Free Trade Agreement
between the Republic of India and the Democratic
Socialist Republic of Sri Lanka, signed in New Delhi on
28th December 1998, and the agreement reached in
subsequent discussions between the two Governments to
continue negotiations on the Annexures to be finalised,
notwithstanding the time-frame stipulated in the
aforesaid Article, we have finalised and exchanged today
the following Annexures which shall form an integral
part of the Agreement:
(i) Annexure D(i)
Negative List of India
(ii) Annexure D(ii)
Negative List of Sri
Lanka
(iii) Annexure E
Items on which India has
undertaken to give 100% tariff concession on coming into
force of the Agreement.
(iv) Annexure F(I)
Items on which Sri Lanka
has undertaken to given 100% tariff concession on coming
into force of the Agreement.
(v) Annexure F(II)
Items on which Sri Lanka
shall give a 50% margin of preference upon coming into
force of the Agreement, with the margin subsequently
being deepened to 70%, 90% and 100%, respectively, at
the end of the first, second and third year of the entry
into force of the Agreement.
(vi) Annexure A Para 1(b)
Items in Chapters 51 to
56, 58 to 60 and 63 of the ITC-HS Code on which India
has undertaken to give 25% tariff concession on coming
into force of the Agreement.
-
Pursuant to discussion
between our two governments, the items related to
tea are not in India's Negative List. However,
import of tea from Sri Lanka to India on a
preferential basis shall be subject to an annual
maximum quota of upto 15 million Kg. On a fixed
tariff concession of 50%.
-
Further, in the interest of
expansion and diversification of Sri Lanka's exports
to India, garments under ITC-HS Chapters 61 and 62,
while remaining in the Negative List {Annexure D(I)},
will be given 50% tariff concession on a fixed basis
by the Government of India subject to an annual
restriction of eight million pieces, of which six
million pieces shall be extended the concession only
if made of Indian fabric, provided that no category
of garments shall exceed one and a half million
pieces per annum.
-
Also, pursuant to the
discussion between our two governments, two items
relating to cement (ITC-HS Codes 2523.21 and
2523.29) will remain on Sri Lanka's Negative List
for the time being. The tariffs on these items would
nevertheless be reduced progressively in such a
manner, so that at the end of eight years from the
date of entry into force of the Agreement, the items
shall attract no duty and shall be phased out of the
Negative List. It is noted that the present regime
of there being no restrictions on the import of
Indian cement into Sri Lanka would continue to be in
effect.
-
These understandings shall
be deemed to be a part of the Agreement and shall
enter into effect on the coming into force of the
Agreement.
-
It is also agreed that the
Agreement will be notified to the WTO under the
Enabling Clause (Decision of 28th November, 1979)
which allows for such arrangements to be entered
into among developing countries. We may decide on
the timing of the notification to WTO after the
Agreement enters into force.
-
I shall be grateful for an
acknowledgement of this letter by the Government of
the Democratic Socialist Republic of Sri Lanka. This
letter and your acknowledgement thereto shall
complete the process of finalisation of Annexures
under Article XVI of the Agreement.
Yours
sincerely,
Sgd. P.P. Prabhu
Unquote
In reply, I have the honour to confirm that the
proposal in your letter is acceptable to the Government
of the Democratic Socialist Republic of Sri Lanka. I
wish to further confirm that your letter under reference
and this acknowledgement thereto, shall complete the
process of finalization of Annexures under Article XVI
of the Agreement and that these understandings shall be
deemed to be part of the Agreement and shall enter into
effect on the coming into force of the Agreement.
Yours sincerely,
Sgd. (P.B. Jayasundera)
Secretary, Ministry of Finance &
Planning and Secretary to the Treasury
Shri P.P. Prabhu
Commerce Secretary
Ministry of Commerce and Industry
Government of India New Delhi.
Trade
