Singapore Prime Minister arrived in Colombo on Monday as part of his official visit to Sri Lanka and India this week and the already-finalized trade pact will be signed in Colombo on Tuesday officially.
The PM delegation also includes Mrs Lee, Foreign Minister Vivian Balakrishnan, Minister for Trade and Industry (Industry) S. Iswaran, and MPs Liang Eng Hwa and Saktiandi Supaat. Both Sri Lankan PM and President will hosting dinner for Mr Lee during the visit. The PM delegation will leave for India on Wednesday to attend the Asean-India Commemorative Summit.
Otherwise, the the trade pact owes to over one-year of negotiations to open up Sri Lankan infrastructure and tourism industry to Singapore companies.
Sri Lankan Foreign Minister Ravi Karunanayake, who led his country's negotiating team to Singapore last year to hold talks with his Singapore counterpart Vivian Balakrishnan and had described the trade pact as the beginning of a new chapter in bilateral ties with Singapore. "We discussed ways of further strengthening training and educational collaboration between two countries," Karunanayake had said.
The Sri Lanka-Singapore Free Trade Agreement (SLSFTA) paves the way for lowering trade barriers to provide more market access to Singaporean firms to tap opportunities in new segments of Sri Lankan market including tourism, infrastructure and industrial development.
The SLSFTA will ease the entry of Singapore companies in key areas, simplify customs procedures and allow greater foreign direct investments.
Singapore investments in Sri Lanka
Singapore firm IE Singapore has already been present in Sri Lanka to develop the Western Region Megapolis. Sri Lanka
Sri Lanka stands as Singapore's 39th largest trading partner as of 2015 with bilateral trade of about S$2.05 billion, with the trade surplus in favour of Singapore at s$1.9 billion. Sri Lankan exports stood at s$146 million as of 2015.
Apart from the traditional trade items including petroleum oils and oils from bituminous minerals, automatic data processing machines and electronic equipment, Singapore is keen to invest local infrastructure projects in view of an increased Chinese presence in the South Asian country.
Some of the Singaporean companies presently operating in Sri Lanka include Prima Holdings, which is the largest Singapore-based investor in Sri Lanka, while CESMA or Surbana Jurong has long been developing the Megapolis in the Western Province and another megapolis in Trincomalee.
Even the iconic 39-storey World Trade Centre in Colombo, is owned by Overseas Reality (Ceylon) Ltd, a subsidiary of the Shing Kwan Group of Singapore.