Tamil Nadu - Chennai   

Auto units eye Sri Lanka

Staff Reporter

Go for joint venture: official

CHENNAI: Small entrepreneurs in India planning to establish manufacturing operations in Sri Lanka must consider joint venture with local partners, said Lakshman R. Watawala, chairman and director-general, Board of Investment (BOI) of Sri Lanka.

At a seminar held here on Tuesday, he said such joint ventures would enhance the total investment in the project and make it eligible for fiscal incentives offered by the Sri Lankan Government. The seminar on `Business and investment opportunities in Sri Lanka' was organised by the Confederation of Indian Industry.

Investment limit

Mr. Watawala was responding to a query by a leader of the Ambattur Industrial Estate Manufacturers' Association whether the Board could reduce the minimum foreign investment limit of $250,000 since it was not easy for small entrepreneurs to meet the norm.

If the small-scale units were keen on going it alone, different incentive schemes operated by other agencies of the Sri Lanka government would be available, Mr. Watawala later told The Hindu .

Seeking a reduction in the minimum foreign investment limit, the former president of the association, K.P. Shashidar Rao, said representatives of 10-12 small-scale auto component units from Ambattur would visit Sri Lanka next month to explore the possibility of setting up manufacturing operations there.

Association president K. Pichumani said the units' plan to set up a manufacturing base in Sri Lanka was driven by low labour cost, huge potential for export and the India-Sri Lanka Free Trade Agreement (FTA).

"Springboard to EU market"

In his presentation, Mr. Watawala said Indian investors should consider Sri Lanka since the island could serve a springboard to the markets of the European Union and Pakistan.

Sri Lanka had an FTA with Pakistan and benefited from EU's Generalised System of Preferences plus scheme (GSP+).

The availability of human resource with comparable skills at competitive costs, strategic location, facilitation and support services and attractive fiscal incentives are the other advantages.

Economic partnership pact

Deputy High Commissioner of Sri Lanka P.M. Amza said post-FTA the India-Sri Lanka trade touched the $1 billion-mark last year. A comprehensive economic partnership agreement between the two countries was on the anvil.

CII Tamil Nadu vice-chairman R. Ramaraj and Manel de Silva, director-general of commerce, Sri Lankan Department of Commerce, spoke.

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