ETCA (Syllabus: GS Paper 2 – IR)

Context: India and Sri Lanka recently held the 12th round of negotiations on the Economic and Technology Cooperation Agreement (ETCA) in Colombo, fostering bilateral economic ties.

 Economic and Technology Cooperation Agreement (ETCA)

• Enhanced Economic Partnership: ETCA, replacing CEPA, represents a pivotal reform for strengthening the economic partnership between India and Sri Lanka.
• Focus: ETCA aims to establish an agreement on trade in services and technological exchange, addressing the shortcomings of CEPA.
• Technical Collaboration and Research: The ETCA agreement seeks to promote cooperation in technical areas, scientific expertise, and research among institutions.
• Improved Quality: ETCA boost standard of goods and services, able to compete on global market and improve opportunities for man power training and human resource development
• Investment in Key Sectors: Oil farms in Trincomalee, renewable energy, infrastructure, and emerging business sectors.
• India's Post-War Economic Involvement: India views ETCA as a mechanism to actively participate in Sri Lanka's post-war economic development by making Indian investments in selected sectors.
• Integration into Indian Supply Chain: The Sri Lankan government aspires to leverage ETCA to become a part of the Indian supply chain, capitalizing on India's "Make in India" initiative to boost its manufacturing sector.

Objectives of ETCA

• To strengthen and advance the economic, trade, investment and technology cooperation between the two parties
• To promote further liberalization of trade in goods, liberalizing trade in services and gradually establish fair, transparent and facilitative trading, investment and investment protection mechanisms
• To expand areas of economic cooperation and establish a cooperation mechanism.