Hon. Minister of Investment Promotion and Enterprise Development of Sri Lanka Mr Rohitha Bogollogama, Governer, Central Bank, Mr N.Cabraal , President, Indian Lanka Chamber of Commerce and Industries, Mr. Mano Selvanathanam, President, Ceylon Chamber of Commerce, Mr. Dayananda, Chairman, India Sri Lanka joint Business council, Mr. Tilak de Zoysa, High Commissioner, Mrs. Nirupama Rao, Deputy High Commissioner Mr. Manikam, Members of the Ceylon Chamber of Commerce, The Joint Business Council and the Indo Lanka Chamber of Commerce and Industry,

Some children are not named soon after birth. In fact , I Know of some cases where children are named even 2 or 3 years after they are born. It is a pleasure to be invited to inaugurate the Indo Lanka Chamber of Commerce and Industries and though I know that this inauguration has been waiting for nearly 2 years and in the last 2 years, as my good friend Mr. Bogollagama just mentioned, India-Sri Lanka relations have taken several steps forward and in inaugurating this Chamber we are in a way celebrating the progress made in the last 2 years.

Our countries have enjoyed close relations over many centuries. The level of economic co-operation that we witness today is a natural progression of the good relations that we have had. Only 6 years ago we signed an agreement for Free Trade, perhaps more accurately, sheer trade. Trade not entirely free! The effort must be to make it freer and freer. When we did that, the level of trade was about 650 million dollars. Through centuries of trade, we reached this level of 650 million dollars. The first billion was crossed in 2002 . The second billion in less than 3 years in 2005 and the way in which the trade is growing in 2006, I am confident that the 3rd billion will be crossed sometime in the next calendar year.

That gives you the flavour, the kind of energy and enterprise that is driving trade between the two countries. The indicators speak for themselves:

• India is the largest source of imports for Sri Lanka.
• India is the 2nd largest investor in Sri Lanka and
• India is the 3rd largest destination for Sri Lankan exports

90% of Sri Lankan exports to India are under the Free Trade Agreement.
45% of Indian exports to Sri Lanka are under the Free Trade Agreement.

Both countries have benefited and both countries are confident that they will continue to benefit by free and fair trade We will benefit even more greatly if we are able to conclude the Comprehensive Economic Partnership agreement(CEPA). The structure of our economies is more or less the same. A little over ½ being accounted for by services, a little less that ¼ is accounted by agriculture and the remainder by investments and in a way, your growth rates mirrors our growth rates. In the first quarter of your financial year 2006, you recorded a growth rate of 8.16%. In the first quarter of our financial year of April-March 2006-2007, although the figures are not out, I am confident that we will record a growth rate of approximately 8% . So, two growing economies tied to each other by history, cultural relations, geography, the opportunities for growing are great! And I am confident that we will seize these options!

I am happy that many Indian companies have come to do business in Sri Lanka. Some of our best known companies like Indian Oil Corporation, Tata, Apollo, which the Minister mentioned, ICICI- our largest private sector bank, CEAT, BSNL are all here. In civil aviation, tourism and banking we have strong relationships. As the minister mentioned, a comprehensive economic partnership agreement has the potential to transform the bilateral economic landscape by further unleashing the inherent synergies between the two countries.

Credit for propelling the India Sri Lanka economic relationship must go to a large measure to the Ceylon Chamber of Commerce. The Chamber particularly the special India Sri Lanka desk has played an important role in imparting momentum to our economic engagements .The new chamber or the chamber that we inaugurated here has not only benefited from the existence of the CCC but also establishes new bonds and bridges to take us to heights not reached so far.

In the matrix of India's economic relations with its neighbours in the SAARC region, needless to say that Sri Lanka occupies a very important place. Our relations with SAARC, if I may say, can be described as WTO plus and our relationship with Sri Lanka can be described as SAARC plus. A flourishing bilateral trade between India and Sri Lanka clearly shows that FTA is a win-win agreement. I am confident CEPA will also be a win-win agreement.

Many other developments have taken place and I think it is worthwhile to mention some of them:-
• Firstly, the number of tourists from India to Sri Lanka has increased tremendously and in 2005 I believe 130,000 Indian tourists arrived in Sri Lanka .
• 90 flights per week connect each country
• Flights to 9 destinations in India and more destinations likely to be added .

Even as these initiatives take root, we must not lose sight of the weaknesses and the deficiencies that till characterize India-Sri Lanka relations. We recognize that given the size of the two economies, there is an asymmetry. But it is this very asymmetry that drove us to conclude an FTA. And it is this asymmetry which drives us to conclude the CEPA. So let me assure all gathered here that we are conscious of this asymmetry and it is because of this asymmetry that we are keen to conclude a CEPA with Sri Lanka so that Sri Lanka can benefit as India will benefit from our economic engagement.

We have offered quotas to Sri Lanka in many commodities and I understand that some of these quotas have not been utilized. I would urge the Sri Lankan industry and trade to please take steps to utilize these quotas. There is also some unfinished business with the FTA. Duty concessions on 2,724 items were to increased from 35% to 70% from March 2006. Perhaps there are some constraints on the part of Government of Sri Lanka but I am confident that both President Rajapaksa and the ministers concerned will address these issues as early as possible.

CEPA has ambitious goals. Among the goals are:

• To create a liberal, transparent and competitive regime.

• To revise the BIPA and the DTAA and to include it under CEPA
• To identify priority areas of investment and
• To engage in investment promotion

Other goals are :
To expand trade in goods, to deepen co-operation in areas like education, tourism, biodiversity, IPR, Ayurveda , sports, agriculture etc., to move to a regime for services that will be based on a broad framework and to identify other sectors of co operation like telecom, construction, engineering, ICT and to expand cooperation in the financial services sector.

The whole world beckons us. The new world will be a great benefit to both India and Sri Lanka. And we would also have led by example, other countries in the region. I am confident that the two governments will seriously engage themselves to conclude CEPA as early as possible. In my short visit to Colombo, I am happy that I had the opportunity to meet the leaders of trade and industry.

I have great pleasure in formally inaugurating this already well established Indo Lanka chamber of Commerce and Industry.

Thankyou.