REPORT ON SPICES BOARD INDIA S PARTICIPATION IN INDIA SHOW HELD AT COLOMBO, SRI LANKA

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2 REPORT ON SPICES BOARD INDIA S PARTICIPATION IN INDIA SHOW HELD AT COLOMBO, SRI LANKA I Mrs. Amrutha M George Asst. Dir. (Accounts), participated in the INDIA SHOW held at Colombo, Sri Lanka from 3 rd August to 5 th August The objective of this document is to report the details of the participation to the Chairman of Spices Board India. India Show Confederation of Indian Industries (CII) together with the support of Ministry of Commerce and Industry, the Government of India, organized INDIA SHOW COLOMBO to boost the bilateral trade with Sri Lanka. The venue for the India Show was at the Bandaranaike Memorial International Conference Hall (BMICH), Colombo. The objective of the show was to provide a platform for Indian companies to showcase their strength and capabilities, provide opportunities to Sri Lankan business to develop linkage with prospective Indian partners, to promote Indian technology and to attract Indian investment to Sri Lanka. The main features of India Show were: three days of exhibition at BMICH from 3-5 August 2012; business conference; one-to-one meetings; visit of business delegation; visit of high-level ministerial delegation; cultural evening and gala dinner. Sri Lanka The Pearl of the Ocean and one of the fastest growing economy and major producers of tea,coffee, cinnamon and gem stone wished a warm welcome to all through India Show. Sri Lanka In the 19 th and 20 th centuries, Sri Lanka became a plantation economy, famous for its production and export of cinnamon, rubber and Ceylon tea, which remains a trademark national export. While the production and export of tea, rubber, coffee, sugar and other agricultural commodities remains important, the nation has moved steadily towards an industrialised economy with the development of food processing, textiles, telecommunications and finance. Main economic sectors of the country are tourism, tea export, clothing, rice production and other agricultural products. In addition to these economic sectors, overseas employment contributes highly in foreign exchange, most of them from the Middle East. As of 2010, the service sector makes up 60% of GDP, the industrial sector 28% and the agriculture sector 12%. The private sector accounts for 85% of the economy. India is the largest trading partner of Sri Lanka.

3 Spices in Sri Lanka The Indian Ocean tropical island of Sri Lanka has been famous for its quality spices since time immemorial. The story of spices from Sri Lanka dates back to 14 th century and evidence has been uncovered of spice trade being conducted through roman period. The western nations such as the Portuguese, Dutch and the English with maritime powers were attracted to the island mainly for its riches in spices, precious stones and ivory that was to be found here. Sri Lanka being a tropical island close to the equator, the fertile and diverse soil types, varying micro climates and the favourable temperature variations, enhances the intrinsic value of most crops grown on this island. Spices like Cinnamon, Pepper, Clove, Ginger, Nutmeg and Mace, Vanilla, Cardamom produced in Sri Lanka. According to Export Development Board of the Ministry of Industry & Commerce, Sri Lanka s total spice exports value in 2010 stood at US $ 165 million and 51% of it belonged to Ceylon Cinnamon (US $ 84 million). Spice exports earnings increased by 27% in 2010 in comparison to 2009 while Cinnamon exports revenues too increased by 13.3% compared to Sri Lanka is the topmost exporter of Ceylon Cinnamon having 85% of world market share for Ceylon Cinnamon while having 14.5% market share in overall world Cinnamon market. Mexico is Sri Lanka s main cinnamon export destination followed by USA. More than 85% of locally produced Cinnamons are exported. The spices used for flavour, aroma and Medicinal properties derive a special value from the said factors. However Sri Lanka could not yet to obtain the true potential of these values as traditional system to produce as bulk commodities rather than to value add offer end product from spices. Also due to lack of various essential cleaning and sterilisation process facilities at pre-export stages spices export are facing risk of rejection in tough international markets. India Sri Lanka Trade Relationship The Indo-Sri Lankan free trade agreement (ISFTA), which was signed on 28 th December 1998 and entered into force with effect from 1 st march 2000, aims at promoting economic linkage between India and Sri Lanka through enhancement of bilateral trade and investment. The agreement covers only trade in goods and requires the two countries to offer market access for each other s exports on duty free basis and concessionary tariffs. The ISFTA does not provide for elimination of non tariff barriers. Trade Liberalization Under the ISFTA, India and Sri Lanka have agreed to offer Zero duty for all products except those in their negative lists, during a period of 3 year and 8 years respectively. The shorter time frame given to India and longer time frame given to Sri Lanka for lowering their tariffs for each other exporters have been agreed upon taking into account the asymmetries

4 prevalent between the two economics. Similarly, the negative list of India contains only 433 tariffs lines, while Sri Lanka s negative list includes over 1200 tariff lines. Details of exports from India to Sri Lanka is given in Annexure III. Detailed Report The flight landed at the Bandaranaike International airport Colombo at 3.35 pm on 2 nd august The temperature was 30 C. The venue for India Show Colombo was about to 50 kms from the airport. After checking into the hotel at 6.30 pm I went to Bandaranaike Memorial International Conference hall (B.M.I.C.H) to make necessary arrangements in the counter for next day. The exhibition was inaugurated on 3 rd August am by our Honourable Minister Shri. Anand Sharma. The exhibition timings were from am to 6.00 pm for the first day and extended till 7.00 pm in the following days. There were two air conditioned halls arranged for the show. Hall A was reserved mainly for Business to Business segment with stalls for Tata, Ashok Leyland, BHEL, MTR, IOC etc and Hall B consisting mainly Business to Customer stalls with very few exceptions. Major part of Hall B was occupied with retail selling stalls for sarees, ladies fashion ware and accessories, sports equipments and kitchen utensils. The Spices Boards stall was C- 35 in Hall B with handloom saree retail outlet on both sides. Board s stall was filled with whole and processed samples of spices collected from Indian exporters. List of exporters who had provided the samples are given in Annexure 2. Arrangements were made to take the details of visitors and to give details of suppliers from India. The visitors count to our stall was high in all the 3 days with maximum visitors on last day. But unfortunately majority of them came to purchase spices assuming our stall as a retail outlet for spices. We got 52 valid enquiries from existing as well as potential importers to Sri Lanka. List is consolidated in Annexture1. A very few enquiries have been received in respect of Spice Oils and Oleoresins.

5 I met Hon. Minister Sri. Anand Sharma after the inauguration and mentioned about Spices Board India stall and invited him to our stall. He conveyed his wishes but could not visit our counter due to time restrictions. Some of other important visitors to our stall were Mr.V.Mahalingam, Consul General (Consulate general of India), Mr. Manish, Counsellor Economics & Commercial (High Commission of India), Mr. Sarada De Silva, Chairman (The Spice Council Sri Lanka) etc. Market study On 6 th August 2012 Market Study was conducted to know about the availability of spices and spice product in Sri Lankan domestic market. Firstly I went to Food City super market. Food City is a supermarket chain in Sri Lanka with multi brand food products including spices. Spices like Chillies, Coriander, Black Pepper, Cinnamon, Clove, Cumin etc. are available in small packets ranging from 100 gms to 1 kg. Samples are bought from Food city for spices like Cumin, Cinnamon and Coriander. Details are given in the table below. Name of Quantity purchased Price(SLR) the Spice Cumin 100gms Cinnamon 50gms Coriander 100gms 60.00

6 In order to know more about the local market, I went to Pettah Market from Food City. Pettah Market is a very large commercial place with many narrow crowded streets of retail and wholesale shops of all kind. A large number of both whole sale and retail sellers of spices are available in the market especially in Old Moors road. Spices were sold in any quantity from sacks of spices. Samples were taken from a shop of Chillies, Clove, Cinnamon and Clove stem. Details of the samples are given below Item Quantity Price(SLR) Chillies with 100gms stem Clove 100gms Cinnamon(Alba) 100gms Clove stem 100gms Mustard 100gms Clove stems were the only item we found new in the market. As per shop keeper Clove stems are used in the preparation of curry powders and masala mixes as it is cheaper and can be used for increasing the quantity.there are 5 grades of cinnamon available in the local market. Details of which are placed below. Grade H1 Grade M4 Grade C5 Grade C5 Special Alba Price 1150/kg 1400/kg 1500/kg 1700/kg 2000/kg I left Colombo on 7 th August 2012 and reached CIAL, Cochin at 2.00pm on 8 th August with one night halt at Chennai.

7 Acknowledgement I express my sincere thanks to the Chairman, Spices Board India for nominating me to INDIA SHOW COLOMBO. Also, I express my sincere wishes to all my colleagues who were instrumental in arranging this programme from the beginning itself and helping at their varying capacities till the end. Amrutha M.George Asst. Dir. (Accounts) References: (1) High Commission of India (orally communicated) (2) Third party information (not verified)