Sri Lanka shares a longstanding relationship with India thanks to its close proximity and cultural ties. The two nations share a robust economic partnership, reinforced by the establishment of the Indo-Sri Lanka Free Trade Agreement (ISFTA) in 2000, designed to promote and foster trade by eliminating tariffs on a wide range of goods.
As Sri Lanka’s third-largest export destination, with US$91.2 million worth of exports in 2022, according to TrendEconomy, India is an important market for Sri Lankan businesses looking to expand their reach. Popular main export items from Sri Lanka to India include textiles and clothing, rubber products, precious stones, and a range of agricultural goods such as tea and spices are also commonly exported.
Understanding the nuances of the export process is crucial for local enterprises looking to tap into the vast Indian market. This guide will walk Sri Lankan businesses through the essentials of shipping items and products from Sri Lanka to India.
Why export from Sri Lanka to India
Expanding into the Indian market offers Sri Lankan businesses access to one of the largest consumer bases in the world with reduced tariffs under the ISFTA. This Free Trade Agreement (FTA) allows Sri Lankan businesses to transact goods and services across the border without tariffs or trade barriers, significantly increasing potential sales and revenue opportunities. The close proximity between Sri Lanka and India not only facilitates competitive shipping fees but also shorter delivery times. Finally, the cultural ties between the two countries create a favourable environment for Sri Lankan products, often leading to higher demand and easier market entry.
Top products exported from Sri Lanka to India
Trade between Sri Lanka and India is a bustling conduit of diverse commodities, reflecting a mutually beneficial exchange of goods. As Sri Lanka's export to India strengthens, there's a clear indication of the Indian market's appetite for specific Sri Lankan products. Recognising and capitalising on these export opportunities can pave the way for significant economic gains for Sri Lankan businesses.
This list contains the top five main export products from Sri Lanka to India, as per trade figures from Trading Economics:
- Residues, wastes of the food industry, and animal fodder: Commanding the list with a value of US$136.70 million in 2022, these exports feed into India's vast agricultural sector.
- Coffee, tea, mate, and spices: A rich heritage of flavours worth US$90.74 million in 2022 is shared across the waters, fueling India's massive consumption market.
- Edible fruits, nuts, peel of citrus fruit, melons: With a value of US$77.43 million in 2022, these exports cater to India's demand for tropical and fresh produce.
- Mineral fuels, oils, and distillation products: At US$58.81 million in 2022, these are critical to India's energy and manufacturing sectors.
- Pulp of wood, fibrous cellulosic material, and waste: Accounting for US$41.71 million in 2022, these materials feed into various industrial processes in India.
Exporting products from Sri Lanka to India: Documents and compliance
Ensuring that all required documentation is accurate and complete is paramount when exporting products from Sri Lanka to India. Meticulous attention to paperwork is vital to clearing customs efficiently and adhering to trade regulations.
Every exporter from Sri Lanka needs to secure these necessary documentation for legal and smooth export of goods to India:
- Export License: Obtain an Export Development Board (EDB) registration number to register for an export license confirming your business is recognised for export activities
- Import License: Obtain an India Importer-Exporter Code (IEC) number from the Directorate General of Foreign Trade in India in order to register for an import license.
- Waybill: This is essential for DHL shipments, as each waybill or label is uniquely numbered for tracking the shipment throughout its journey.
- Invoice: A commercial or proforma invoice must accompany non-document shipments. This invoice contains information such as declared value, country of origin, and reasons for export. It acts as a declaration for customs authorities to determine duties or taxes.
Exporting products from Sri Lanka to India: Regulations and other considerations
Sri Lankan businesses shipping to India need to be aware of several key regulations to ensure smooth customs clearance. While the specific regulations can vary depending on the product being exported, there are general guidelines and requirements that must be followed:
- Standards and quality compliance: Exporters must adhere to standards set by the Sri Lanka Standards Institute (SLSI) and ensure their products meet the quality requirements of both Sri Lanka and India. This includes compliance with international standards like ISO for quality management and environmental management systems.
- Tariffs and taxes: The ISFTA allows many Sri Lankan goods to be exported into India at reduced tariffs or duty-free, but specific conditions, such as domestic value addition requirements, may apply onto certain goods.
- Restricted and prohibited items: Sri Lankan businesses must acquaint themselves with restricted or prohibited items for import into India in order to avoid penalties, confiscation or legal issues. This list can change, so it is advisable to contact the customs authorities directly or your logistics provider for the most accurate and up-to-date information.
- Packaging and labelling requirements: Proper packaging and labelling are required to protect goods during transit and ensure compliance with standards in India. This includes specific regulations for certain products like food, pharmaceuticals, and chemicals.
Cost-efficient shipping options from Sri Lanka to India
Selecting the most cost-efficient shipping options from Sri Lanka to India is crucial for businesses aiming to expand their market reach while keeping overheads manageable. Shipping time from Sri Lanka to India can vary depending on the mode of transport. Air freight is typically faster but comes with higher costs, making it suitable for urgent or high-priority shipments. On the other hand, sea freight presents a more economical option, ideal for larger, less time-sensitive consignments, albeit with longer shipping times.
When it comes to exporting, DHL Express offers rate quotes and transit time, so businesses will never be surprised by unexpected fees.
