Sri Lankan Companies Can Reap Multiple Economic Benefits

Business Claude Gunasekera Indian High Commissioner Gopal Baglay, State Minister of Finance Shehan Semasinghe and Governor Dr. P. Nandalal Weerasinghe at the event Tags:  Print Edition

Sri Lankan companies and entrepreneurs can reap multiple economic benefits by paying for financial transactions in Indian rupees (INR) when trading with India.

Indian High Commissioner in Sri Lanka Gopal Baglay recently told a gathering in Colombo attended by the representatives of Bank of Sri Lanka, State Bank of India and Indian Bank that this move will also help towards increasing bilateral trade between the two countries. “This is the right time to look into this aspect and this can also lead to more investments from India.”

The two countries are currently exploring the possibility of using the Indian Rupee for Sri Lanka’s economic transactions. Various advantages like low transaction cost, quick service, easy access to business loans also are some of the other plus points of this initiative. State Minister of Finance Shehan Semasinghe appreciated the close economic relationship between the two countries and the financial and humanitarian support extended by India over the past year including the strong financing assurances provided by India in context of the IMF support programme for Sri Lanka.

“With this move trade relationship between the two countries are likely to get a boost while it is also believed that Sri Lanka-India friendship too will increase. If the use of Indian Rupee is initiated between the two countries, stronger and closer relations can be established through trade and investment activities.”

Central Bank Governor Dr. P. Nandalal Weerasinghe mentioned the strong desire among Indian and Sri Lankan business communities for enabling trade settlements in INR. He called for expanding this facility over a period of time to utilize it for the full range of capital and current account transactions. Sri Lanka is also investigating the use of the Indian Rupee in Sri Lanka. It is also noteworthy that representatives of Banks of Sri Lanka, State Bank of India, and Indian Bank have exchanged their experiences in this regard along with stakeholders of the tourism sector. Short term, low exchange charges, easy trade credit facilities are the benefits of Indian rupee transactions.

It is noteworthy that the Sri Lankan and Indian business community has been requesting to carry out commercial transactions in Indian rupees for a long time. Economists also say that by using the Indian rupee, both countries can benefit in terms of trade transactions. Economists say that this initiative will bring positive benefits in the joint efforts to build strong and close economic cooperation between the two countries through activities that prioritize trade and investment activities.

Also, digital payments between the two countries will be another opportunity to improve the economic friendship between the two countries. It is noteworthy that the Indian government has issued a new announcement on ‘trading with the rupee’ while the value of the Indian rupee has continued to decline against the US dollar in the international trade market. India and Malaysia have agreed to carry out commercial transactions in Indian rupees and this move is said to be beneficial to both countries.

India has already started trading with 18 countries in INR and this is said to have caused significant changes in the international trade market.

Thursday, April 20, 2023 – 01:00