The current political and economic crisis in Sri Lanka has affected Indian trade. The island country is a major market for agricultural products including sugar, grapes, and onions.
Since the start of the economic crisis, the majority of exporters have kept trade suspended, despite some complaining that their payment is being stuck.
For the financial year 2021–2022, India's exports to the island country were a robust $5,208.3 million, an increase of 65% over the previous year. The main exports to Sri Lanka include engineering goods, skimmed milk powder, sugar, onions, and grapes. Given the easy connectivity through the sea, Indian exporters normally send out their consignments from ports in vessels.
Exporters referred to Sri Lanka as an extension of the Kolkata market when describing it as a significant market for Indian sugar. Sri Lanka's monthly consumption of 40,000–50,000 tonnes of Sugar, 90 per cent comes from India.
However, Indian exporters have stopped their shipment to the nation during the past three months, particularly after the economic crisis began. Rahil Sheikh, managing director of MEIR Commodities, stated that there is not much surplus sugar remaining to export for the current season.
“With the government putting a cap on exporters, chances of exports for this season are slim,” he said.
Sri Lanka utilized the majority of the credit line authorized by the Reserve Bank of India to import food and fuel.
Another commodity that has since stopped going to Sri Lanka is Indian onions. India shipped 1.62 lakh tonnes of the food item to Sri Lanka during the financial year 2021–22.
It is important to mention that protests have intensified amid an emergency in Sri Lanka by acting President Ranil Wickremesinghe, just hours after Gotabaya Rajapaksa fled to the Maldives.
