Arsalan Ali

Pakistan’s exports to Sri Lanka posted a growth of 38% to $373.412 million during FY2021-22 compared to $269.168 million in FY2020-21, reports WealthPK.

During FY22, trade was in Pakistan’s favor, and had a surplus of $291.684 million with Sri Lanka, while it was recorded as $184.066 million in FY21, according to the provisional data of the State Bank of Pakistan.

As of 2021-22, Sri Lanka made imports of $81.728 million compared to $85.102 million last year. Thus, the total bilateral trade volume has increased by $455.140 million compared to last year’s $354.270 million, showing a growth of 28% year-over-year (YoY).

However, month-over-month (MoM) exports to Sri Lanka surged by 29% to $34.426 million in June 2022 from $26.580 million in the previous month of the same financial year.

On YoY basis, exports to Sri Lanka grew by 5%, reaching $34.426 million in June 2022 from $32.682 million in the same month of FY21.

According to the UN COMTRADE database, the top export items from Pakistan to Sri Lanka are cotton, salt, stone, plaster, lime, and cement followed by edible vegetables, certain roots, and tubers, knitted or crocheted fabric, pharmaceutical products, manmade staple fibers, plastic and cereals.

On MoM basis, imports from Sri Lanka declined by 11% to $5.705 million in June 2022 compared to the previous month of FY22. On YoY basis, imports from Sri Lanka declined by 25% to $5.705 in June 2022 from $7.643 million in the same month of FY21.

Talking to WealthPK, Suleman Akram, Research Associate at the Trade Development Authority of Pakistan, says Pakistan has great trade potential with Sri Lanka. He added that the business communities and policymakers should keep in touch, and policymakers should put forth policies that increase bilateral trade relations.

Suleman said the trade volume between the two countries was quite low, not reflecting the true trade potential.

He said had trade continued to grow as it did in FY22, then these two countries would have become major trading partners. He added that bilateral trade would grow and strengthen in the coming years. He said both countries should organize exhibitions for promotion of their products.

The recent report of the Pakistan Business Council on trade between Pakistan and Sri Lanka highlights that the primary issue these days is Sri Lanka's foreign exchange crisis. Textile product trade between these two countries is limited due to consumer design preferences, it added.

According to the report, the Pakistan-Sri Lanka Free Trade Agreement (PSLFTA) should be strengthened further by including services and investment in Phase-II in order for the two countries to have a deeper economic relationship.

The report pointed out that when unilateral tariff changes were involved, more coordination between authorities in both countries was required to strengthen the bilateral relationship.

In order to improve logistics and shipping, the Ministry of Commerce (MOC) and the Trade Development Authority of Pakistan (TDAP) are advised to allow the companies to operate on Free on Board (FOB) rather than Cost and Freight (CNF) and Carriage and Insurance Paid (CIP). It is also suggested that Pakistan International Airlines (PIA) start flying direct from Karachi/Lahore to Colombo.

According to the report, MOC and TDAP should assist Pakistani exporters in establishing a distribution network and offices in Sri Lanka and enable them to increase exports to Sri Lanka.

Independent News Pakistan-Wealthpk