Sri Lanka’s Ideal Motors and India’s Mahindra launch vehicle assembly plant in Sri Lanka as joint venture
Sri Lanka’s Prime Minister Ranil Wickremesinghe and Indian High Commissioner in Sri Lanka Taranjith Singh Sandhu have declared open a vehicle assembly plant in Sri Lanka that was set up as a joint venture between India’s Mahindra and Sri Lanka’s Ideal Motors
Accordingly, Mahindra Ideal Lanka (Pvt.) Ltd is to assemble vehicles for the domestic market.
Despite having a free trade deal with India, completed vehicles brought from India are taxed at over 200 percent in some cases and giving an advantage when components are imported in complelely knocked down form (CKD) and assembled, the local media has noted.
Wickremesinghe has said at the opening ceremony that seats and some other items were made in Sri Lanka and there were opportunities for Sri Lankan firms to export components.
The plant in Kalutara, which has Ideal Motors holding a 65 percent stake and Mahindra holding 35 percent, has a capacity of 5,000 units a year.
The plant will initially produce KUV100 mini SUVs, but the production line could be re-jigged to assemble other models as well, Ideal Motors Deputy Chairman Aravida de Silva has been quoted as saying.
OSL take:
Sri Lanka and India enjoy strong bilateral and trade ties that have been further strengthened by the free trade agreement between the two countries. All this has resulted in many joint ventures/partnerships being formed between Sri Lankan and Indian businesses. Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment and the many trade agreements as well as trade concessions enjoyed by the country has made Sri Lanka the ideal business destination in the South Asian region. Foreign businesses/investors looking at doing business with India could explore the possibility of setting up base in Sri Lanka. Also, Indian businesses/investors could confidently explore business opportunities in Sri Lanka as well as look at forming partnerships with local companies and vice versa.
| Article Code : | VBS/AT/21082019/Z_3 |