The Government of the Republic of India and the Government of the Democratic Socialist Republic of Sri Lanka, (hereinafter referred to as the "Contracting Parties"). CONSIDERING that the expansion of their domestic markets, through economic integration, is a vital prerequisite for accelerating their processes of economic development. BEARING in mind the desire to promote mutually beneficial bilateral trade. CONVINCED of the need to establish and promote free trade arrangements for strengthening intra-regional economic cooperation and the development of national economies. FURTHER RECOGNIZING that progressive reductions and elimination of obstacles to bilateral trade through a bilateral free trade agreement (hereinafter referred to as "The Agreement") would contribute to the expansion of world trade. HAVE agreed as follows:
The Contracting Parties shall establish a Free Trade Area in accordance with the provisions of this Free Trade Agreement and in conformity with relevant provisions of the General Agreement on Tariff and Trade, 1994.
The objectives of this Agreement are: