President’s Special Envoy for Foreign Investment Hanif Yusoof yesterday said that Sri Lanka’s economic relationship with India has outgrown the existing Free Trade Agreement (FTA), calling for a modern framework that reflects the realities of today’s global economy.
Addressing the ‘India Calling’ forum, Yusoof noted that the Indo-Sri Lanka FTA, signed 25 years ago, had played a significant role in expanding bilateral trade, particularly Sri Lankan exports to India, but said it was designed for a ‘different era.’
‘The current FTA belongs to an earlier era of international trade,’ he said.
According to Yusoof, the global economy is no longer driven solely by the movement of goods. Instead, growth increasingly depends on services, technology, digital payments, logistics, clean energy, tourism, professional expertise, integrated supply chains, and the knowledge economy.
‘Our economic relationship must evolve beyond goods into deeper economic cooperation,’ he said.
Against this backdrop, Yusoof said negotiations on the proposed Economic and Technology Cooperation Agreement (ETCA) should be viewed as a ‘natural progression’ rather than a controversial departure from the existing trade framework.
He acknowledged that sections of the Sri Lankan business community have traditionally approached deeper economic integration with India cautiously, largely because of India’s size.
However, he argued that such concerns should not prevent Sri Lanka from capitalising on opportunities presented by its closest neighbour. ‘We should approach this conversation with confidence rather than fear,’ he said.
Yusoof also challenged what he described as a longstanding protectionist mindset, arguing that safeguarding national interests should not mean insulating the economy from competition and investment.
‘For too long, we have believed that protecting our national interest means protecting the wealth of a few at the cost of growing opportunities for the many,’ he said. ‘The question should not be how do we protect ourselves. The better question is how can Sri Lanka prosper?’
He opined that a modern economic partnership with India should create opportunities for Sri Lankan manufacturers, service providers, technology firms, and professionals to integrate into Indian value chains, while also encouraging greater Indian investment into Sri Lanka.
‘If we combine our geographic advantage with skilled people, competitive infrastructure, predictable regulations, and business-friendly policies, Sri Lanka can become an important platform in leveraging India’s growth,’ Yusoof said.