TERM REPORT

GROUP MEMBER
Humuyoun Baig FA13-BB-0011
Murtaza FA13-BB-0019
Mujtaba Iqbal FA13-BB-0023
Umar Farooq SP13-BB-0027
Ismail Tariq FA13-BB-0036

SUBJECT: International Trade

SECTION: A
DATE: 31/March/2016
TOPIC: Pakistan-Srilanka Trade
SUBMITTED TO: Sir Rizwan-Ul-Hassan

LETTER OF ACKNOWLEDGEMENT
All the praise to Almighty Allah the most beneficent and merciful who gave us this
opportunity to compile this report. We have taken efforts in this report.
It has been a pleasure to be Sir Rizwan-Ul-Hassan student. We would like to thank him
and Mohammad Ali Jinnah University for giving us the chance.
His lectures have been very interesting and we have learnt a lot and enjoyed our time
with him. We are extremely grateful to him and appreciate his efforts for providing us
full support, encouragement and valuable guidance on every difficult step of this course.
Its been an honor to be your student. We hope you will keep guiding us in the future as
well.

Trade

LETTER OF TRANSMITTAL

31STMarch, 2016
Dr. Rizwan-UL-Hasan,
Course Instructor,
MAJU
Dear Rizwan UL Hasan,
This is the final report based on the topic "Pak-Srilanka Trade", as requested it is being
submitted to you on March 31, 2016. The report has been prepared keeping in mind the
topic is Pak-Srilanka Trade.

Yours truly,

Humuyoun Baig
Murtaza
Mujtaba Iqbal
Umar Farooq
Ismail Tariq

INTRODUCTION
PakistanSri Lanka relations refer to bilateral relations between Pakistan and Sri Lanka.
Both countries are in the South Asia region. The earliest proper diplomatic and trade
contacts between Pakistan and Sri Lanka (then Ceylon) date back as early as 1948.
Pakistan is the second largest trading partner of Sri Lanka in South Asia. Sri Lanka was
the first country to sign a Free Trade Agreement with Pakistan in July 2002 and it
became operational in June 2005.
Top Pakistani exports to Sri Lanka include cotton products, cement, refined sugar and
potatoes. Top Sri Lankan exports to Pakistan include vegetable products, rubber,
fiberboard,Tea and coconut products. Pakistans exports to Sri Lanka grew from USD
154 million in 2004 to USD 316 million in 2013, but Pakistan could only claim 1.7% of
total Sri Lankan imports from the world in 2013. Sri Lankas exports to Pakistan grew
from USD 46 million to USD 63 million between 2004 and 2013, and Sri Lanka claimed
only 0.14% of total Pakistani imports from the world in 2013.

 PAKISTAN SRI LANKA FREE TRADE AGREEMENT (PSLFTA)

The Pakistan-Sri Lanka Free Trade agreement (PSLFTA) was signed in July 2002 and
became operational from 12th June 2005. The FTA required both countries to achieve
zero tariffs on a range of items during a certain time-frame. Pakistan granted 100%
immediate concession on 206 items at the 6-digit HS level whereas Sri Lanka granted
100% immediate concession on 102 items at the same level. Pakistans no concession
list ran to 540 items at the 6 digit level while Sri Lankas no concession list ran to 697
items, which were cut down to 607 items in April 2013. Furthermore, Pakistan granted
Sri Lanka a duty free tariff rate quota (TRQ) on tea products as well as another TRQ at
35% margin of preference on the MFN rate on various clothing items. Sri Lanka
reciprocated by granting Pakistan a duty free TRQ on long grain Basmati rice and
potatoes. The terms of the FTA required Pakistan to phase out tariffs on items not on its
no-concession list by 2008, while Sri Lanka had till 2010 to do the same. Major
Pakistani exports that Sri Lanka granted full concession to include cotton, apparel,
knitted fabrics and cement. Major Sri Lankan exports granted full concession by
Pakistan includes rubber, coconut products and vegetable products.

DEMAND OF PRODUCTS
There is a great demand in Sri Lanka for Pakistani products. Pakistan can export cotton
yarn and fabrics, potatoes (fresh/chilled), pharmaceutical products, knitted or crocheted
fabrics, articles of iron and steel, galvanized pipes, rice, fish and many other kinds of
sea food items, textile made-ups, apparel and clothing accessories and rods of refined
copper.
Sri Lankan products in demand in Pakistan include: Coconut products, tea, rubber and
rubber-based products, while Pakistani products in demand in Sri Lanka are rice,
vegetables, pharmaceuticals, potatoes, textiles and apparel.

After the initial success, both countries failed to fully utilise the FTA that came into effect
in 2005. As a result, bilateral trade remains range bound with an average of $350 million
for the last six years.
The trade balance is heavily in favour of Pakistan. Its exports to Sri Lanka amounted to
$267 million while Sri Lankan exports to Pakistan were worth just $58 million, according
to the Pakistan Bureau of Statistics data (2014-15).
Out of the total $267 million worth of exports to Sri Lanka in fiscal year 2014-15, $89
million or 33% constituted only cotton cloth a traditional Pakistani export item.

Bibliography
http://economyofpakistan.blogspot.com/2009/12/pak-sri-lanka-free-tradeagreement.html?m=1
http://tribune.com.pk/story/1023785/pakistan-aims-to-double-exports-to-sri-lanka-withina-year/
http://www.dawn.com/news/1233242