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Sri Lanka-Turkey Trade Relations

Overview of Sri Lanka

Sri Lanka, an Island nation with a population of 21.8 Million (as of 2019) located in the Indian Ocean in strategically important location in the ancient “Silk Route”. A country famous and inherited for “Ceylon Tea”, “Ceylon Cinnamon”, Blue Sapphire and Gems is currently moving towards for Industrial oriented products alone with traditional agricultural sector.

Sri Lanka is a founding member of the GATT (General Agreement on Tariffs and Trade) and the World Trade Organization. Despite the status of SVE (Small Vulnerable Economy), Sri Lanka continues to pursue a liberalized/ open economic trade policy regime in 1977, well ahead of the rest of South Asia.

Due to the open economic trade policy regime and the strategies, Sri Lanka engaging in regional trade agreements such as South Asian Free Trade Area (SAFTA), Asia Pacific Trade Agreement (APTA) and bilateral Agreements Indo – Sri Lanka Free Trade Agreement (ISFTA),Pakistan – Sri Lanka Free

Trade Agreement (PSFTA). And the recently concluded Free Trade Agreement with Singapore included to hers basket of Regional Trading Arrangements. (For more information on the Framework

Agreements, Product Coverage, Rules of Origin please visit; www.doc.gov.lk ).

Key Economic & Social Indicators of Sri Lanka (as per year 2019)

1. Population - 21.8 Million

2. Growth of midyear Population - 0.6 %

3. Population Density (persons for sq.km) - 348

4. GDP at current market prices - 84 US$ Billion

5. Per capita Income GDP at current market prices - 3852 US$

6. Total Exports - 11940 US$ Million

7. Total Imports - 19937 US$ Million

8. Literacy rate - 92.5%

9. Expectancy of Life at birth - 75.5 years

10. Human Development Index - 0.780, Rank 71 among 189

(Source: Central Bank of Sri Lanka)

Composition of Sri Lanka’s exports

• Industrial Products

1. Textiles & Garments

2. Rubber Products

3. Gems & Precious stones

4. Machinery & Mechanical appliances

5. Transport equipment

6. Leather & Footwear

7. Ceramic Products

• Agricultural products

1. Ceylon Tea

2. Coconut

3. Spices

4. Rubber

(Source: Central Bank of Sri Lanka)

Composition of Sri Lanka’s imports

• Consumer Goods

1. Food & Beverages (Rice, Sugar & Confectionary, Dairy products, Lentils)

2. Non Food consumer goods ( Medical & pharmaceutical, personal vehicles, home appliances,

Clothing & accessories)

• Intermediate Goods

1. Fuel

2. Textiles & Textile articles

3. Chemical products

4. Wheat & Maize

5. Fertilizer

• Investment Goods

1. Building materials

2. Machinery & Equipment

3. Transport equipment

Sri Lanka’s main exporting destinations are USA, EU, UK, India, Japan, and UAE. Turkey ranked

among the top 15 countries as per 2019 trade statistics.

Sri Lanka’s main importing markets are India, China, EU, UAE, and Singapore.

(Source: Central Bank of Sri Lanka & Sri Lanka Customs)

Trade Relations between Sri Lanka & Turkey

Trade interactions between Sri Lanka and Turkey go back to the Ottoman times. Sri Lanka then known as “Ceylon” was extensively used by the pre Ottomans for their trading and flourished during ottoman period. That is one reason the Ottoman imperial authorities appointed an Honorary Consul in Sri Lanka in the year 1864.

With the establishment of resident Missions in Ankara and Colombo in the year 2012 and 2013 respectively both countries have now embarked with the new vigour to consolidate the friendly relations and expand it in the areas of trade.

Sri Lanka and Turkey Trade Statistics

Year

Sri Lanka’s

exports to

Turkey

(US $ Millions)

Sri Lanka’s

imports from

Turkey (US $

Millions)

Total Trade

(US $ Millions)

2012 84.43 37.40 121.83

2013 90.97 36.71 127.68

2014 98.17 51.96 150.13

2015 87.86 51.18 139.04

2016 105.11 51.63 156.74

2017 113.80 70.92 184.72

2018 100.68 119.04 219.72

2019 97.84 79.87 177.71

Source: Turkish Statistical Institute

Main Exports to Turkey

1. Tea

2. Yarn (other than sewing thread)

3. Activated Carbon

4. Retreated or used pneumatic tyres of rubber/ solid tyres of rubber/ New pneumatic tyres, of

rubber

5. Spices

6. Coco- peat

7. Surgical gloves

8. Spices

Main Imports

1. Iron & Steel

2. Woven fabrics

3. Knitted or crocheted fabrics

4. Electrical transformers, static converters and inductors

5. Parts & accessories of motor vehicles

6. Machines & machinery equipment

Economic and Technical Cooperation Agreement between Sri Lanka and Turkey Sri Lanka and Turkey recognized themselves as potential trading destination and in 1988 signed the Agreement on Trade in Izmir. As per the Agreement both side agreed to establish “Joint Committee on Trade” and the First Session was held in Colombo in 1990. During the meeting parties agreed to strengthen and deepening long term economic relations and realized that it can be achieved through the expansion and diversification of economic and technical cooperation. In 2003 the preparatory meeting for the “Joint Committee on Economic and Technical Cooperation Agreement” held in Sri Lanka.

However, the First Session of the ““Joint Committee on Economic & Technical Cooperation” was held in 2016 in Turkey and parties agreed to explore more potentials. The Second Session was scheduled for this year for more interactions.

Bilateral Trade Instruments signed between two countries Sri Lanka and Turkey have entered into following bilateral instruments (Agreements/MoU) to enhance trade, investment relations between two countries.

1. Agreement on Trade between Sri Lanka & Turkey-1988

2. Agreement on Economic and Technical cooperation between Sri Lanka &Turkey-2002

3. Bilateral Air Services Agreement Between Sri Lanka & Turkey- 2008 

Concluded Agreements

1. Elimination of Double Taxation with respect to taxes on income and the prevention of tax

evasion and avoidance Double Taxation – January 2020

Turkish Generalised System of Preference (GSP)

The Turkey's GSP came into effect on January 2002 and Sri Lanka is one of the beneficiary countries

of Turkish GSP Scheme The Handbook of Turkish GSP Scheme is can be found in the below link. It provides comprehensive information (product coverage, Rules of Origin, documentary requirements etc) regarding the tariff advantages and the conditions which need to be met to benefit from the Turkey's GSP scheme.

https://unctad.org/en/PublicationsLibrary/itcdtsbmisc74rev1_en.pdf