Zero customs duty

India has kept its promise to bring zero duty on all goods of Sri Lankan origin within three years of the implementation date of the Free Trade Agreement. The department of revenue issued a notification on March 18, '03 to conclude the historic Vajpayee-Chandrika agreement of December 28, '98 under which the original exemption notification was issued by the department of revenue on March 1, '00. There is a small negative list consisting of sensitive goods like areca nuts (supari) where the extent of the cut is below 100%.

During the three-year implementation period, India progressed to a cut of 90% of the normal rate of duty in the face of determined opposition from economic ministries representing the interests of Indian producers. Constant pressure to open up from the external affairs ministry and deft handling by the South-Asia section in the commerce ministry has culminated in full elimination of duties on trade from Sri Lanka to India.