Explanation. – for the purposes of this notification, «preferential treatment» for each product is the exemption granted under the Indian government`s communication to the Ministry of Finance (Ministry of Finance), No. 26/2000 of 1 March 2000, and includes preferential concessions. Disputes that may arise between the commercial units of the contracting parties are referred to the head chambers for amicable settlement. These references are, as far as possible, governed by reciprocal consultations between the chambers. If no amicable solution is found, the case is referred to an arbitration tribunal for binding decision. The tribunal is formed in consultation with the relevant arbitration bodies of the two countries in a joint committee. Disputes between the parties regarding the interpretation and application of the provisions of this agreement or an act adopted under it are settled amicably through negotiations in which neither party can notify the committee. The Government of the Republic of India and the Government of the Democratic Socialist Republic of Sri Lanka (`contracting parties`). CONSIDERING that the expansion of their domestic markets through economic integration is an essential condition for accelerating their economic development processes. Given the desire to promote mutually beneficial bilateral trade. CONVAINCUS that free trade rules need to be defined and promoted in order to strengthen intra-regional economic cooperation and the development of economies. NOTE that the phasing out and removal of barriers to bilateral trade through a bilateral free trade agreement (the so-called «agreement») would contribute to the expansion of world trade.
AGREED THAT the Indian government grants duty-free access to all exports from Sri Lanka for goods freely entering India; with the exception of the items listed in Appendix D of this agreement, in accordance with the phased departure schedule indicated below:- When the agreement comes into force, access to tariffs for «E» trailers applies to 50% preferential margin for other items, with the exception of Schedule D items. Concessions on the positions of chapters 51 to 56, 58 to 60 and 63 are limited to 25%. The preferential margin for items covered at point (b) is increased to 100% in two stages within three years of the agreement coming into force, with the exception of textile products covered in point 1 b). Explanatory note: for the purposes of this application – (i) transfer for geographical reasons or for considerations exclusively related to transportation needs; (ii) products are not marketed or consumed; and (iii) the products have not undergone any operation other than unloading and transloading or an operation necessary to keep them in good condition. The Sri Lankan government grants tariff concessions for exports from India to Sri Lanka for goods freely admitted to Sri Lanka, as described below: Zero duty for Schedule F – I positions after the agreement enters into force. Preferred margin of 50% for points in Schedule «F» – II after the agreement comes into force. The preferential margin for these items is increased to 70% and 100% respectively at the end of the first, second and third years of the agreement`s entry into force. For other items other than those in Schedule D, rates are reduced by at least 35% before three years and by 70% before the end of the sixth year and by 100% before the effective date of the agreement before the end of the sixth year and by 100% before the effective date of the agreement.
3. Both parties will cooperate fully, in accordance with their legislation and national procedures in the event of alleged circumvention or circumvention of the agreement, to resolve problems arising from circumvention, including facilitating joint factory visits and contacts between representatives of both parties, on request and on a case-by-case basis.