The Indo-Sri Lanka Free Trade Agreement (ISFTA) was signed in 1998 with the aim of promoting bilateral trade between India and Sri Lanka. The agreement resulted in the elimination of tariffs on most goods traded between the two countries, but it also came with its advantages and disadvantages.

Advantages:

1. Increased bilateral trade: The ISFTA has resulted in increased trade between India and Sri Lanka. The agreement has created a market for Sri Lankan exports in India and has opened up new opportunities for Indian businesses to expand in Sri Lanka.

2. Tariff elimination: The ISFTA has eliminated tariffs on most goods traded between the two countries. This has made trade between the two countries more cost-effective and has reduced the burden on businesses.

3. Access to larger markets: The ISFTA has given Sri Lankan businesses access to the large Indian market, which has a population of over 1.3 billion people. This has created opportunities for Sri Lankan businesses to expand their customer base and increase their revenues.

4. Economic growth: The ISFTA has played a role in promoting economic growth in both countries. This has led to the creation of new jobs, increased investment, and improved standards of living for the people in both countries.

Disadvantages:

1. Trade imbalances: The ISFTA has led to increased imports from India into Sri Lanka, resulting in a trade imbalance. This has negatively impacted Sri Lanka`s trade balance and has led to a situation where the country is importing more than it is exporting.

2. Competition: The ISFTA has led to increased competition between Sri Lankan and Indian businesses. This has made it difficult for some Sri Lankan businesses to compete with their Indian counterparts.

3. Dependence: Sri Lanka has become increasingly dependent on India for its trade. This has led to concerns about the country`s economic independence and its ability to negotiate trade deals with other countries.

4. Non-tariff barriers: Despite the elimination of tariffs, non-tariff barriers such as technical standards and regulations continue to pose challenges for Sri Lankan businesses. This has made it difficult for some Sri Lankan businesses to access the Indian market.

In conclusion, the ISFTA has had both advantages and disadvantages for India and Sri Lanka. While it has led to increased trade and economic growth, it has also created challenges such as trade imbalances and increased competition. Overall, the agreement has played a significant role in promoting bilateral trade and economic development, but it is important for both countries to address the challenges and find ways to make the agreement more effective.