India Sri Lanka Foreign Trade Agreements (ISLFTA)

Different types of tariff concessions offered by India and Sri Lanka to each other are:

1. The present status under the ISLFTA, as on the 2012, is that both the parties have eliminated tariff on all the products lines, except those which fall under the negative/exclusion list.
2. The Government of India agreed to grant duty free access to all exports from Sri Lanka in respect of items freely importable into India, except on items listed in Annexure ‘D’ of this Agreement, in accordance with the phase out schedule detailed below:

Upon entry into force of the Agreement:

1. Zero duty access for the items in Annexure ‘E’ of the Agreement;
2. 50 percentage margin of preference on the remaining items except on items listed in Annexure ‘D’ of the Agreement. Concessions on items in Chapters 51 to 56, 58 to 60 and 63 shall be restricted to 25percentage.
3. The margin of preference on the items mentioned in above shall be increased to 100percentage in two stages within three years of the coming into force of the Agreement, except for the textile’s items.

Concession offered by Sri Lanka Government shall provide tariff concessions on exports from India to Sri Lanka in respect of items freely importable into Sri Lanka, as given below: -

Zero duty for the items in Annexure ‘F’– I, upon entering into force of the Agreement. 50% margin of preference for the items in Annex ‘F –II, upon coming into force of the Agreement. The margin of preference in respect of these items shall be 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. For the remaining items except those in Annexure ‘D’, the tariffs shall be brought down by not less than 35% before the expiry of three years and 70% before the expiry of the sixth year and 100% before the expiry of eight years, from the date of entry into force of the agreement.

The tariff concessions offered by India and Sri Lanka to each other in Merchandise Trade:

• The tariff concessions offered by Sri Lanka are
• The negative list of no tariff reductions in Annexure D of the Agreement (1216 items)
• Immediate tariff elimination in Annexure F-1 of the Agreement (319 items)
• Phased tariff elimination in Annexure F-II of the Agreement (889 items) 
• Residual list for longer period for tariff elimination (2742 items)

India’s categories are a negative list of

• No tariff reductions in Annex D (431 items)
• 25percentage tariff reduction (605 items)
• Immediate tariff elimination in Annexure E (1357 items)
• 50% tariff reduction; and a residual list of longer phase out period for tariff elimination (2870 items)