July 04, Colombo: As its bilateral trade and investments with Sri Lanka increased to unprecedented levels, the second largest Arabian economy in the Gulf, United Arab Emirates (UAE) has called for an Investment Protection Agreement (IPA) with Sri Lanka.
UAE Ambassador to Sri Lanka Ahmad Ali Al Mualla paying a courtesy call on the Minister of Industry and Commerce Rishad Bathiudeen on Wednesday in Colombo said the UAE is an open country and wishes to call for more exports from Sri Lanka.
The Ambassador has remarked that Sri Lanka-UAE relations are cordial and historic, and Trade and investments are key pillars of this ongoing relations.
"I am pleased to observe that our bilateral trade levels are now at a historic high" said Ambassador Al Mualla and added: "Still we wish to call for more exports from Sri Lanka. We are keen to further develop our relations. We are a leading Arabian investor in Sri Lanka. We like to partner with Sri Lanka in trade and in tourism sectors in investment projects. We are very keen on completion of Investment Protection Agreement (IPA) with Sri Lanka at the earliest if possible. We are an open country. We receive anyone."
According to the Department of Commerce, Sri Lanka - UAE bilateral trade surged to a historic and unprecedented $ 1.83 Billion in 2017. This is a huge YoY increase in trade from previous year - a 37% surge from 2016's $1.34 Billion.
In recent years, leading UAE investors have been increasingly eyeing Sri Lanka and as a result UAE has become the largest investor in Sri Lanka from Gulf Cooperation Council (GCC) countries, with projects in Sri Lanka exceeding $405 million (2012-2017 totals).
A multitude of UAE FDIs are here but among the well-known projects in Sri Lanka are Galadari (hotels), Emirates Group (travel), Al Futtaim (automotive, with AMW), Etisalat (mobile telecom), LULU Group (food processing) and Al Ghurair (milling).
Minister Bathiudeen welcomed Ambassador Al Mualla's interest towards enhanced investment and trade relations with Sri Lanka.
"At present both governments are exchanging notes on signing the Promotion and Protection of Investment Agreement and we are likely to sign once both parties agree on final terms at an advanced negotiation stage," Minister Bathiudeen apprised the UAE envoy.
"I am also pleased of the strong growth in trade between both countries. We thank the businesses at both ends for this development. UAE imports to Sri Lanka are 82% of our trade but only 18% are our exports are going to UAE. Therefore we like to expand our exports basket. I am pleased that you express interest to buy more products from Sri Lanka," he added.
The bilateral trade is in favor of the UAE with 82% of 2017's total trade being imports from UAE to Sri Lanka at $1.5 Billion. Among the major imports to Sri Lanka were petroleum product (70% of total imports)-petroleum oils, fuel oil, petrol, kerosene jet fuels, bitumen-and gold (16% of total).
Sri Lanka's leading exports to UAE in 2017 were tea (28% of total exports), apparel (18%), fuel oil (15.4%) and beverages such as vinegar.