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Lanka to resume negotiations on stalled trade agreement with India
11 rounds of bilateral negotiations were held on the Economic and Technological Cooperation Agreement
BY MEERA SRINIVASAN
Sri Lanka will soon resume talks with India on the stalled Economic and Technological Cooperation Agreement (ETCA), authorities said, as Colombo looks to trade pacts and foreign direct investments to rebuild its crisis-hit economy.
“We hope to commence negotiations on the ETCA later this month,” said K.J. Weerasinghe, Chief Negotiator of FTAs at the International Trade Office, recently set up under the Presidential Secretariat. “We had finished 11 rounds of bilateral talks the last time [between 2016 and 2019] with the aim of broadening and deepening the [ISFTA] that is in force since India-Sri Lanka Free Trade Agreement,” said the senior official, who was formerly Director General of the Department of Commerce, following several diplomatic stints focusing on Sri Lanka’s international trade interests.
However, the Maithripala Sirisena and Ranil Wickremesinghe-led government that was in power at the time could not complete negotiations. The ETCA faced considerable resistance from sections within Sri Lanka, mainly from nationalist groups and trade unions who saw the pact as giving India an unfair advantage. The ETCA itself followed decade-long, but futile, negotiations on yet another pact — the “Comprehensive Economic Partnership Agreement (CEPA)”.
Sri Lanka’s recent emphasis on FTAs and FDIs is part of President Ranil Wickremesinghe’s strategy for economic recovery in the island nation, reeling under the impact of its worst economic crash. The country’s economy contracted by an estimated 9.2 % this year and is estimated to contract by a further 4.2 % in 2023, according to the World Bank. Meanwhile, the government is talking to its creditors to restructure its foreign debt and qualify for IMF support early next year.
In his Budget speech last month Wickremesinghe, who is also the Finance Minister, underscored the need for Sri Lanka to have greater access to the world market. “Towards this end, Sri Lanka has resumed efforts to integrate with key markets such as India and China. Sri Lanka will also resume trade negotiations with Thailand, which along with the FTA with Singapore, sets the steppingstone for Sri Lanka to engage in dynamic regional trading arrangements such as Regional Comprehensive Economic Partnership (RCEP),” he told Parliament. The six-time Prime Minister was elected President through an urgent parliamentary vote in July at the height of Sri Lanka’s crisis. He replaced former President Gotabaya Rajapaksa, who fled the country after being ousted by a popular people’s uprising.
In line with Wickremesinghe’s vision, the International Trade Office is focussing on greater engagement in the neighbourhood, a “look east” policy, for possible integration with RCEP down the line, Weerasinghe told The Hindu in an interview at his office facing the Presidential palace that anti-government protesters stormed in July in a culmination of mass agitations.
India and China are the top two sources of import for Sri Lanka. In 2021, Sri Lanka’s imports from India totaled In the coming talks with India, Sri Lanka seeks to negotiate an explicit acknowledgment of the “asymmetry” in trade with India [in the proposed ETCA]; work together to address some pending concerns over the implementation of the existing ISFTA and negotiate for an easing of quotas on Sri Lankan exports to India. “We must also take a fresh look at services. Rather than taking rigid, inflexible positions, we must see how to make this [pact] a win-win agreement for both countries,” Weerasinghe said. $ 4.74 billion, while the island nation exported about $980 million worth of good to India.
(The Hindu)
News
Diesel replacement costs up to Rs. 4.5 bn in April
Coal power generation falls by 27 GWh
A sharp decline in coal-fired electricity generation in April 2026, compared to the corresponding month last year, may have cost Sri Lanka more than Rs. 4.5 billion, as the country was compelled to rely on significantly more expensive diesel-powered generation to make up the shortfall, according to power sector data.
The coal-based electricity generation, in April 2026, was 27 GWh lower than in April 2025, a development that has sparked concern among energy experts and economists over the mounting financial burden on the country’s already strained power sector.
Industry calculations reveal that generating the lost 27 GWh through diesel-fired power plants would require approximately 8.1 million litres of fuel, based on a standard consumption rate of 0.3 litres per kilowatt-hour.
With fuel costs estimated at around USD 286 per barrel, or roughly USD 1.80 per litre, the replacement power would have cost approximately USD 14.57 million. At the prevailing exchange rate of about Rs. 315 to the US dollar, the bill exceeds Rs. 4.5 billion for April alone.
Energy sector analysts say the figure highlights the enormous economic value of maintaining high availability at coal-fired power plants, particularly at a time when Sri Lanka is seeking to reduce electricity costs and strengthen energy security.
“The financial impact of losing low-cost coal generation is substantial. Every unit not generated by coal has to be replaced by a much more expensive source, usually diesel or fuel oil, which ultimately affects the finances of the power sector and the wider economy,” a senior energy analyst said.
Even under a more conservative calculation, based on the average electricity generation cost of around Rs. 72 per unit recorded in 2025, the loss remains significant. The 27 million units not generated from coal would translate into an additional cost burden of nearly Rs. 2 billion.
The decline in coal generation comes at a critical juncture for Sri Lanka’s energy sector.
The government has repeatedly emphasised the need to maintain affordable electricity tariffs, while reducing dependence on imported fossil fuels and expanding renewable energy capacity.
Experts warn that any sustained reduction in low-cost baseload generation could undermine these objectives, increasing the need for costly thermal power and placing additional pressure on foreign exchange reserves.
The latest figures are expected to intensify scrutiny of generation planning, fuel procurement strategies and the operational performance of major power plants. They also underscore the importance of ensuring uninterrupted operation of coal-fired facilities until sufficient renewable and storage capacity is available to replace them reliably.
With the country striving to maintain economic stability and energy affordability, analysts argue that avoiding such generation shortfalls must remain a top priority for policymakers and power sector planners.
By Ifham Nizam
News
Sallay on hunger strike: Counsel warns CID
Asith Siriwardena Counsel for former Director of State Intelligence Service, Major General (Retd.) Suresh Sallay, detained under the Prevention of Terrorism Act (PTA) over the 2019 Easter Sunday attacks, has called upion the Director of the CID, SSP G. S. Abeysekara, to transfer his client either to a private or government hospital to receive urgently needed teatment.
Sallay was on a hunger strike, claiming mistreatment by the CID, his wife said, after visting him, yesterday.
Siriwardena wrote to the CID Director yesterday (07) after Sallay was visited by his wife, son and brother.
The text of the letter: “The family observed that Mr. Sallay’s physical condition has deteriorated to an alarming and critical level.
“He is reportedly unable to attend the visitation without the physical assistance of two officers. During the visit, he informed his family that he had refused medication, saline, food, and water. He further expressed a belief that his death is imminent and requested that arrangements be made for the donation of his eyes. He also requested an immediate visit from his Attorney for the purpose of executing his last will and other related legal documentation.
“These statements, and circumstances, demonstrate a grave deterioration in his physical and psychological condition. It is apparent that he is no longer capable of making rational decisions concerning his own welfare, health, and survival.
The prolonged conditions, under which he is presently being held have, at the very least, created a serious and immediate risk to his life.
“The State assumes a non-delegable duty of care toward every person held in its custody. Once an individual is deprived of liberty, the responsibility for safeguarding that person’s life, health, and wellbeing rests squarely upon the authorities exercising control over that individual. Any failure to discharge that duty in the face of a known and imminent medical emergency is a matter of the utmost legal seriousness.
“You are hereby formally notified that Mr. Sallay requires immediate medical intervention by qualified independent medical professionals and urgent transfer to an appropriate hospital facility capable of providing comprehensive assessment and treatment. Any delay, refusal, or failure to act despite clear knowledge of his precarious condition may give rise to personal and institutional liability under the criminal and civil law of Sri Lanka
“Should General Sallay suffer irreversible injury or death while remaining in the present conditions despite this explicit warning, it will be open to the relevant authorities, courts, and investigative bodies to examine whether such conduct amounts to a deliberate disregard of a known and foreseeable risk to life. Those responsible for decisions concerning his continued detention and medical care may be required to account personally for their actions and omissions.
“Accordingly, I demand that:
1. Mr. Sallay be transferred forthwith to a government or private hospital equipped to provide urgent medical treatment;
2. He be examined immediately by independent medical specialists, including psychiatric professionals if necessary; His legal representatives and family be granted reasonable access to him;
3. A written update on his medical status and the measures taken for his protection be provided without delay. This letter constitutes formal notice. Any further failure to act despite knowledge of the circumstances set out herein will be relied upon in any future judicial, criminal, constitutional, or international proceedings arising from harm suffered by my client.”
News
Opp. questions why Rs 10 bn meant for Ditwah victims held in Treasury account
The Opposition says the NPP government should explain why the funds received by Rebuilding Sri Lanka haven’t been utilised to provide relief to those affected by Ditwah cyclone in late November last year.
The failure on the part of the government to utilise as much as Rs 10 bn, received from local and foreign donors, came to light when the National Audit Office (NAO) appeared before the Public Finance Commission recently.
The NAO told the House Committee that no statutory fund currently existed under the name “Rebuilding Sri Lanka” and the programme operated through an account maintained under the Deputy Secretary to the Treasury.
The NAO declared that no payments had been made through this account to date.
Former SLPP MP Sanjeewa Edirimanne said that until the disclosure made by the NAO the country had been led to believe the Rebuilding Sri Lanka fund provided post-Ditwah relief. Pointing out that JVP General Secretary Tilvin Silva’s declaration in Jaffna that funds allocated to hold Provincial Council polls
had been utilised to assist Ditwah victims, Edirimanne said such blatant lies were propagated while the government held on to Rs 10 bn meant for the disaster victims.SJB MP Mujibur Rahman questioned the rationale behind keeping funds received specifically for Ditwah victims still living under extremely difficult conditions. (SF)
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