In a difficult economic situation, Russia continues to search for new markets and promotes cooperation with long-standing trade partners. His Excellency Dr. Saman Weerasinghe, Ambassador Extraordinary and Plenipotentiary of the Democratic Socialist Republic of Sri Lanka to the Russian Federation tells Russian Business Guide about plans for active cooperation between the two countries.

Tell us about trade and economic relations between the
two countries. 
Trade between Sri Lanka and Russia has been growing significantly since the disintegration of the Soviet Union in 1991. The total trade turnover between the two countries reached USD227m in 2008, up from USD212m in 2007. However, it declined to USD196m in 2009 mainly due to the global economic crisis. Nevertheless, it increased again to USD360m in 2011 recording a 34% increase compared with the year earlier, but again in 2012 the total trade between the two countries declined to USD353m and due to the decrease of export to Russia rather than the increase of imports from Russia in 2012. The year 2013 saw the rise of the total trade turnover to USD425.76m and in 2014, the total trade turnover marked the rapid increase to USD534.1m (an increase of 25.44% compared with the year earlier).

The balance of trade has continuously been in favor of Sri
Lanka. It stood at USD13.46m in 2014 and has been gradually decreasing since 2012.

The statistics given below show that due to the considerable
increase of imports from Russia, the balance of trade has been
reduced accordingly compared with the year earlier. The trade balance in 2015 is in favor of the Russian Federation for the first time in the history.

Let’s talk about tea exports to Russia. 
Tea is the main export item from Sri Lanka to Russia in which Sri Lanka exported 44,100.81 Mt of Ceylon tea valued at USD 228.27m in 2014.

Russia was the single largest buyer of tea from Sri Lanka for
several years. However, tea exports from Sri Lanka to Russia declined from 54,211Mt in 2011 to 44,100.81Mt in 2014.
Sri Lanka remains the leading tea supplier to the Russian
Federation with market share of 29.8% in 2014. However, the market share of Ceylon tea in the Russian market declined from 31.5% in 2013 to 29.8% in 2014.

What are the plans for cooperation for this year?
Sri Lanka plans to participate at PRODEXPO, WORLD FOOD exhibitions for promoting Sri Lankan food products such as quality pure Ceylon tea, coconut-based products, fish products and spices. Sri Lanka is well known for its best quality Tuna in the world. Sri Lanka also plans to send a business delegation to promote these products, as well as gems and jewelry products. Though being little known in the Russian market, Sri-Lankan jewelers guarantee high quality products. Known as the treasury of sapphires, Sri Lanka claims the most precious blue sapphire in the world.

It may be appropriate to invite and encourage Russian investors
(industrialists) to open factories in Sri Lanka to cater Chinese,
Korean, Indian, Pakistan and other South Asian markets by utilizing the applicable tariff concessions granted under Preferential/Free Trade Agreements such as ISFTA (Indo-Sri Lanka Free Trade Agreement), PSFTA (Pakistan-Sri Lanka Free Trade Agreement), APTA (Asia Pacific Trade Agreement), SAARC FREE Trade Area (SAFTA) etc.

What is the situation with tourism cooperation?
In the past few years, total tourist arrivals from Russia to Sri Lanka
recorded an increasing trend. The number of tourist arrivals from
Russia was 2.03% of all world tourist arrivals to Sri Lanka in the
year 2010 and it was 4.56% or 69 718 Russian tourists in 2014. The majority of Russian tourists visited Sri Lanka on vacation.

Interviewed by Elena Zarovnaya, CCI-Inform
Russian Business Guide» №1(23), March 2016 - Chamber of Commerce and Industry of the Russian Federation