Pakistan aims to double exports to Sri Lanka within a year

By effectively utilising the FTA, exports could be increased to $500 million

KARACHI:

The Trade Development Authority of Pakistan (TDAP) - the top government body responsible for promoting exports - expects to double Pakistan’s exports to Sri Lanka to $500 million from the current $267 million within a year.

“Pakistan can easily double exports to Sri Lanka in a year’s time by effectively using the duty concessions under the Free Trade Agreement (FTA),” said TDAP Secretary Rabiya Javeri Agha in an interview with The Express Tribune.





After the initial success, both countries failed to fully utilise the FTA that came into effect in 2005. As a result, bilateral trade remains range bound with an average of $350 million for the last six years.

The trade balance is heavily in favour of Pakistan. Its exports to Sri Lanka amounted to $267 million while Sri Lankan exports to Pakistan were worth just $58 million, according to the Pakistan Bureau of Statistics data (2014-15).

Pakistan plans to organise a single-country exhibition from January 15-17 in Colombo with an aim to boost exports.

The TDAP has prioritised sectors such as textile, pharmaceutical, engineering goods and small and medium enterprises (SMEs) for the exhibition.

“We have given priority to these sectors as we believe these are the areas where Pakistan has the potential to multiply its exports,” said Agha. “Our next target will be to increase exports to $1 billion but that obviously will take a few more years.”



Out of the total $267 million worth of exports to Sri Lanka in fiscal year 2014-15, $89 million or 33% constituted only cotton cloth - a traditional Pakistani export item.

The second and third top exported items to Sri Lanka were cement ($37 million) and pharmaceuticals ($20 million). Other mentionable products were vegetables, rice, value-added textile, bed wear and other commodities.



Pakistan has only utilised 29% of the FTA concessions so far, therefore, its target is to utilise the FTA first by exporting those products that have huge demand in Sri Lanka, explained Agha.

“Sri Lanka mainly exports textile products like men’s T-shirts while it imports bed wear, trousers, silk and synthetic textile and other ready-made garments. Pakistan’s exports are slowly growing and it can further increase its share.”

However, she added Pakistan needed to move from traditional cotton cloth to value-added garments to increase its exports. “Moreover, the engineering sector has a huge potential among top-25 products that Sri Lanka imports and Pakistan exports.”



In May 2015, the Pakistan Business Council (PBC), a not-for-profit research-based business advocacy forum that represents Pakistan’s 47 largest businesses, noted that Pakistan and Sri Lanka had the potential to increase bilateral trade over six times to $2.7 billion by just effectively utilising the FTA.

Agreeing with the findings of the PBC report, Agha said both countries should establish connections between business communities that have been one of the top hindrances in the way of bilateral trade.

The PBC report also noted the absence of single-country exhibitions in each other’s country.

Pakistan’s exports to Sri Lanka grew from $154 million in 2004 to $316 million in 2013, an increase of 105% in nine years. Pakistan only accounted for 1.7% of total Sri Lankan imports from the world in 2013.

On the other hand, Sri Lankan exports to Pakistan grew from $46 million to $63 million, an increase of just 37%. Sri Lanka had only 0.14% share in Pakistan’s imports from around the world in 2013, according to the PBC report.

Published in The Express Tribune, January 8^th, 2016.

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