India will increase a garment import quota by three million pieces a year to eight million without a sourcing requirement being imposed on Sri Lanka, the island's industry ministry said citing a statement by a visiting Indian official.
Sri Lanka's ministry of industry quoted India's textile ministry secretary Kiran Dhingra as saying in Colombo when she led a textile industry delegation to the island on September 19.
Dhingra had said that from September 06, India has removed duty for HS code 61 and 62 apparels, the industries ministry statement said.
In 2011, Sri Lanka had exported 50 million dollars of garments, woven fabrics and other textiles to India, making it the 14 largest buyer.
Sri Lanka's industry minister Rishad Bathiudeen had invited Indian textile factories to invest in the island.
"We also look for support to strengthen textile supply chain such as raw material, yarn, for example," the minister was told the visiting Indian secretary.
"Though our apparel sector technology is strong, our textile sector is weak in this regard and we believe that India know-how can support technology transfer in this regard.
"More importantly we invite Indian investors to Sri Lanka for joint ventures and strategic alliances."
The statement quoted Dhingra as saying that a 500 acre industrial zone called 'India-Sri Lanka Concept Integrated Textile Cluster' with 350 million initial investment, could be started to supply Sri Lankan manufacturers.
India and Sri Lanka has a free trade agreement through which nationalist Sri Lankan producers have blocked 1,198 items being freely bought by citizens of the island through a so-called 'negative list'.
India has a negative list of only 196 items but there are some quota and non-tariff barriers that have prevented Indian citizens from freely accessing Sri Lankan products including apparel.
Especially after independence from British rule India and Sri Lanka descended into mutual poverty by blocking free trade among its citizens.