India continues to be the top trading partner of Sri Lanka: Report

India maintains its position as Sri Lanka's top trading partner, according to the recently released annual report for 2022 by the Central Bank of Sri Lanka (CBSL). The bilateral trade between the two nations surged beyond USD 5.5 billion in 2022, demonstrating a robust economic relationship, while exports from Sri Lanka to India saw a year-on-year increase. "Latest #IndiaSriLanka trade figures for 2022 show the growing strength of our economic linkages," the Indian High Commission in Sri Lanka tweeted on Friday (May 12, 2023), citing the CBSL report. The latest report reiterates the trend seen over the past several years. According to information shared by the Indian High Commission in Sri Lanka in January 2023, India was Sri Lanka’s largest trading partner with an overall bilateral merchandise trade of US$ 5.45 billion in 2021. Merchandise trade between India and Sri Lanka stood at US$ 3.6 billion in 2020. India as a major economic development partner of Sri Lanka The economic and commercial relationship between India and Sri Lanka has seen significant development over the years. Trade between the two countries was further boosted with the signing of the India-Sri Lanka Free Trade Agreement (ISFTA) in 2000. According to Indian High Commission, Sri Lankan exports to India have increased substantially since 2000 when ISLFTA came into force and more than 60% of Sri Lanka’s total exports to India over the past few years have used the ISFTA benefits. The two countries also have strong economic linkages that span a variety of development fields, including infrastructure, connectivity, transportation, housing, healthcare, livelihood and rehabilitation, education, and industrial growth. In addition to being Sri Lanka's top trading partner, India has made a major contribution to the nation's foreign direct investment, investing a total of USD 2.2 billion thus far. The main investments from India continued to be in the areas of petroleum retail, tourism & hotels, manufacturing, real estate, telecommunications, and banking & financial services. India is also the country from which most visitors come to Sri Lanka. Despite the Covid-19 pandemic's early effects, tourism-related traffic between the two nations has picked up speed in recent times. In 2022, a total of 719,978 international tourists visited Sri Lanka, and India contributed the highest share of 17.1% (123,004 tourists). In order to improve connectivity between the two countries, India and Sri Lanka signed an Open Sky Agreement in 2016. As a result, Sri Lankan Airlines is now able to fly as many times as they like to six important Indian airports. Prior to the pandemic, Sri Lankan Airlines had over 100 weekly flights to 14 locations in India, securing its status as the country's biggest foreign airline, the Indian High Commission pointed out.