A lot of people have questioned India and asked as to why it is aiding several neighboring and underdeveloped nations while it is having several internal issues of its own. A recent image too surfaced that says India is providing cheap petroleum products to Sri Lanka despite the fact that petrol and diesel prices have hiked to as much 80 INR.
Sri Lanka not only buys petrol but also India exports petroleum products, motor vehicles, agricultural products, paper products etc. accordingly on duty free concessions. All these are according to the bilateral agreement as per the India Sri Lanka Free trade Agreement(ISLFTA) – 1993. Sri Lanka apparently has an annual import of approximately 20% from India.
But Sri Lanka does not only buy petroleum products from India, UAE is actually the largest importer for Mineral Oil products.
Here’s a list of country imports in Sri Lanka ($ mil) –
- India – 384.3
2. UAE – 712.6
3. Singapore – 605.9
4. China – 155.3
5. Malaysia – 116
Indian Oil Corporation actually has a subsidiary in Sri Lanka called Lanka IOC PEC fueling 200+ gas stations over the island.
Why India has expensive Petroleum Products?
The answer is taxes. India is the country which puts the highest amount of Taxes on petroleum products especially petrol and diesel. Petrol and diesel has a base price and then taxes are imposed on it. Usually the base price varies according to the market trends, so if the base price is 18 INR, you end up paying taxes up to 275% to the Central and State Governments of India. On the other hand, Sri Lankans pay less taxes on petrol and diesel.
Why India gives financial assistance to other countries?
India has been giving financial assistance to neighboring and financially dependent countries to have better international political relations and ties. Recently India helped in creating a library in Afghanistan and helped in developing their Parliament too.
India had introduced a policy called the ‘Neighbourhood Policy‘ to assist financial assistance across the South Asian region that includes countries like Myanmar, Sri Lanka, Bangladesh, Nepal, Bhutan, Maldives.
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