The Daily FT report suggests that India and Sri Lanka should work together to develop Sri Lanka’s Northern Province into a high-growth “Frontier Province” by implementing a specialized fast regulatory regime. This includes establishing a ‘Northern Single-Window Authority’ with the ability to issue licenses, work permits, and environmental clearances within 30 days, as well as offering 5-to-10-year preferential visas for Indian tech professionals.
Moreover, the report recommends the formal adoption of the Indian Rupee (INR) for direct trade settlements within the Northern Provincial Economic Zones to mitigate exchange rate fluctuations for MSMEs. The aim is to mirror the successful, industry-focused models of Southern Indian states to capitalize on India’s financial resources and markets, thereby transforming the North into a crucial link for mutual prosperity.
The report also advocates for the creation of 10-year corporate income tax breaks and complete exemption from Customs Import Duty (CID), Value Added Tax (VAT), and the Ports and Airports Development Levy (PAL) on all machinery and construction materials imported during project implementation. It proposes the establishment of specialized Export Processing Zones (EPZs) in Jaffna and Mannar, modeled after South India, to integrate them into the supply chains of Chennai and Coimbatore.
Experts emphasize that Sri Lanka must join forces with India to enter the AI race successfully. Sri Lanka’s President Anura Kumara Dissanayake stressed at the AI Summit that countries falling behind in AI development might face heightened vulnerabilities, jeopardizing the shared goals of inclusive, equitable, and sustainable progress.
