India, Sri Lanka to work for economic, tech agreement

India and Sri Lanka on Friday agreed to start discussions on an Economic and Technology Cooperation Agreement (ECTA) and unveiled plans to cooperate on power, digital payments, connectivity and green energy.

- Shashank Mattoo

The ECTA with Sri Lanka will focus on tariff and non-tariff barriers as well as investment rules.

The development came during the visit of Sri Lankan President Ranil Wickremesinghe to New Delhi.

The two countries agreed to operationalize India’s Unified Payments Interface (UPI) to ease digital payments across borders. Foreign secretary Vinay Mohan Kwatra told reporters that the initiative could kick off in two to three months. Bhutan and Nepal have already adopted India’s signature digital payments platform.

New Delhi and Colombo also unveiled plans to establish power grid connectivity, possibly boosting electricity trade in the neighbourhood. According to the India-Sri Lanka Economic Partnership Vision released by the Ministry of External Affairs, this development “has the potential to not only bring down the costs of electricity in Sri Lanka but also help create a valuable and dependable source of foreign exchange for Sri Lanka."

The two sides will also construct a multi-product petroleum pipeline for steady supplies to Sri Lanka. Last year, the island nation saw widespread fuel shortages as it grappled with a crippling economic crisis.