Amidst open and at times covert battles to dislodge each other’s influence, China has emerged as Sri Lanka’s biggest trading partner, relegating the longstanding dominant India to second place, reports Financial Times.
China had eclipsed India last year by a slim yet decisive $ 57 million difference between the two in terms of total trade with Sri Lanka.
Combined import and export trade between China and Sri Lanka amounted to $ 4.426 billion in 2016, as opposed to the Indo-Lanka figure of $ 4.369 billion. In 2015, India continued to be the biggest trading partner for Sri Lanka with a bigger difference of $ 891 million as against China. Indo-Lanka total trade in 2015 was $ 4.91 billion whilst that of Sino-Lanka was $ 4.02 billion.
China’s overtaking of India in 2016 however stems from Sri Lanka’s greater reliance on the former for imports. China was the biggest import source with $ 4.215 billion, pushing India’s figure of $ 3.8 billion to second place. In 2015, Sri Lanka’s imports from India amounted to $ 4.2 billion as against $ 3.7 billion from China.
For Lankan exports, despite challenges, India is a bigger market between the two Asian giants. Sri Lanka’s exports to India last year amounted to $ 54 million, though it is the lowest in the past five years.
Lankan exports to China amounted to $ 211 million, down from a record $ 308 million in 2015. The performance against the two nations reflects the overall trend as Sri Lanka’s exports have been on the decline for the past two years.
The relegation of India to the second slot in total trade comes amidst dissent from certain sections of the private sector over the proposed Economic and Technical Cooperation Agreement between the two countries.
The rise of China also comes ahead of a proposed free trade agreement expected to be finalised by later this year as well as differences of opinion in Colombo over some of Beijing’s mega investments including in Hambantota.