Srilanka, being an island shares trading relations with many countries. As no country is completely self independent, export and imports of goods from across the world is a necessity for each country. Srilanka is experiencing growing trading relations with many nations. For instance, Sri Lankan export increased from 841 USD Million in February of 2014 to 1069.90 USD Million in March of 2014.
A country selects a trading partner on the basis of its trading requirement, geographical location and political and economical stability of the partner country. In the process of trading, the most important thing is that the requirements of a particular country is being fulfilled by the export or import of the products by another countries and visa verse. The trading relations between countries tend to change with variations in trade policies, agreements,resource availability and export and import needs.
Srilanka and its trade relations:
Before studying the trading relations of a country it is important to understand the features of that country’s economy. Some of the features of Srilankan economy are:
- Srilanka have a mixed economy with both public and private players involve in the process of production.
- It is a developing economy depending largely on agriculture, light industry and services.
- Overall GDP of the country was calculated to be 59.42 billion US dollars in 2012.
- Agriculture counts for approx 21 percent of GDP in Srilanka.
- Srilanka is a well known destination for FDI due to certain reasons. India is among the top five countries offering FDI in Srilanka.
India and Srilanka trade relations:
India and Srilanka have a long and high valued trade relations. They had signed a Free Trade Agreement in December 1999 for better trading opportunities. India was an important trading partner of Srilanka even prior to this agreement.
|Srilanka and India Export and Import data|
|Years||Export to India ($ Million)||Import from India ($ Million)|
Source: Central Bank of India. Annual report, Various issues.
The above mention data shows that the value of trade between India and Srilanka was always significant.
The main import origins of Srilanka are: India, China and Singapore.
In the current scenario, India counts for 18% of the Srilankan import. While china and Singapore counts for 16% and 9% respectively. In the year of 2012, India sourced 21.3% of the Srilanka’s import and China and Singapore sourced 16.5% and 8.6% respectively.