Digital trade pact could revive stalled ETCA negotiations, says Wijesinha

Sri Lanka's stalled Economic and Technology Cooperation Agreement (ETCA) with India could gain new traction through a separate digital trade framework, sources familiar with ongoing negotiations suggest.

The digital economy component is being explored as a distinct negotiating track that could advance bilateral economic ties while broader ETCA discussions remain deadlocked. The approach reflects efforts by both countries to unlock progress on trade and investment issues that have faced domestic political resistance, particularly in Sri Lanka where concerns about Indian competition have complicated past discussions.

Proponents of the digital-first strategy argue that creating a focused agreement on digital services, e-commerce, and technology cooperation could establish momentum for the wider ETCA. Such a pact would address growing bilateral interest in IT services, data governance, and digital infrastructure without immediately confronting more contentious trade liberalization issues.

The ETCA framework has remained unresolved for over a decade, with multiple rounds of negotiations yielding limited progress. A narrower digital agreement could demonstrate the viability of deeper economic cooperation and build confidence for resolving outstanding differences on goods and services trade.

Both nations have indicated interest in strengthening technology and innovation partnerships as part of broader regional development goals. The digital initiative reflects recognition that selective sectoral agreements may offer a more feasible path forward than comprehensive trade negotiations in the current political environment.