Dr. Razeen Sally of IPS spoke about the bilateral trade deficit between India and Sri Lanka, stating that the existence of this deficit is not necessarily negative for Indo-Lanka relations.
He argued that, despite perceptions fuelled by the local media, the trade deficit is not caused by unfair trade practices on India’s part, and that “the arguments that the trade deficit is bad are, of course, economically illiterate arguments.”
Instead, Dr. Sally emphasised that domestic barriers in Sri Lanka affect export potential.
He also highlighted that creating a domestic reform agenda favouring unilateral trade liberalisation and fostering domestic competitiveness would encourage foreign direct investment in the Sri Lankan economy.
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