Contraband Trade and Unofficial Capital Transfers between Sri Lanka and India

Abstract

The unofficial two-way contraband trade between Sri Lanka and India overshadows the official trade and capital transfers between the two countries. Quantitative estimates of this unofficial trade and transfer of capital are, however, hard to come by. This article attempts to make some estimates of contraband trade and unofficial capital transfers and proposes some solutions to the problem that this poses to the economies of the two countries.