U.S. Embassy officials met with the Export Development Board to strengthen bilateral trade and investment ties, exploring tariff exemptions and inviting Sri Lankan exporters to SelectUSA 2026 and U.S. buyers to Sri Lanka Expo 2026; Sri Lanka's 2025 exports to the U.S. were USD 2,999.15m (up 3.07%).
Asian shares wobbled as U.S. and European selloffs driven by AI-related pressure on software hit markets, while oil rose after the U.S. shot down an Iranian drone and gold rebounded from a recent rout.
Interest RatesFuel & Energy PricesGold & PawningIT & Digital
MILCO distributed dividends to dairy farmers for the first time in 21 years and will provide incentives to 22,000 farmers after reporting its highest-ever 2025 sales and a historic net profit. The Prime Minister and Agriculture Minister credited SOE reforms, pledged continued government support and highlighted inclusive growth.
SLAEA Chair Rajitha Jayasuriya said Sri Lanka's apparel industry will prioritise deeper integration with India, quota-free access, accelerated automation and AI adoption, and urgent policy reforms in 2026 to strengthen regional supply chains and meet sustainability/traceability requirements.
US President Trump said Washington will cut tariffs on India to 18%, removing a 25% punitive levy tied to Russian oil purchases; Indian officials have not publicly confirmed the commitments. The change would mainly benefit labour‑intensive exporters such as textiles, marine and leather.
Colombo market recovered as the ASPI rose 0.22% (52.82 pts) to 23,734.50, driven by high-net-worth crossings that made up 49.4% of turnover (COMB contributed Rs.3.2bn); market turnover was Rs.8.24bn and foreign investors were net sellers of Rs.1.3bn.
Ocean Lanka’s OCL Academy of Textile and Apparel completed its second TVEC-recognised training batch with 33 employees graduating. The academy — established in 2023 and TVEC-registered for its Certificate in Textile and Apparel Manufacturing — will begin a third batch in February 2026.
A Sri Lanka delegation led by Deputy Minister Chathuranga Abeyasinghe met Saudi Arabia’s Public Investment Fund in Riyadh on 25 Jan 2026 to pitch investment opportunities in Sri Lanka and its capital market. PIF outlined its 2026–2030 strategic plan and both sides agreed to open follow-up channels and pursue a bilateral investment protection agreement.
Construction ActivityTourismRenewable EnergyHealthcare & Pharma
China will ban hidden (flush) car door handles from Jan 1, 2027, requiring both exterior and interior mechanical releases; car models already approved for launch get an additional two years to achieve compliance.
An India–U.S. trade deal spurred a broad market rally, with the Nifty up 2.81% to 25,799.5 and Reliance plus export-oriented sectors leading gains; the rupee strengthened over 1% to 90.34 per dollar.
Exporters
Daily FT·Feb 3, 2026·Management or board change·DPLPositive
Dankotuwa Porcelain PLC appointed Miyuru Rajapakshe as Chief Executive Officer. Rajapakshe, formerly COO with nine years' association with the company and prior roles at Ambeon Holdings and Ceylon Tobacco, holds an MBA and a Lean/Six Sigma Black Belt and brings extensive operational and manufacturing experience.
The U.S. announced a deal to cut tariffs on Indian goods to 18% (from 50%) in exchange for India ending Russian oil purchases and buying large volumes of U.S. energy; the announcement gave few implementation details and timing is unclear.
Deputy Minister Chathuranga Abeysinghe led a Sri Lankan delegation to meet Saudi Public Investment Fund officials in Riyadh to present investment opportunities, capital-market reforms and discuss a Bilateral Investment Protection Agreement; both sides agreed to continue talks.
India's 2026-27 Budget offers foreign cloud providers a 20-year tax holiday until 2047 on revenues from services sold abroad if those services are delivered from data centres located in India. It also introduces a 15% cost-plus safe harbour for related-party data-centre services and expands electronics/semiconductor incentives, while flagging power and water constraints for capacity expansion.
Cleantech (Pvt) Ltd (Abans Group) became Sri Lanka’s first GP Certified plastic recycler on 7 Jan 2026, meeting standards to produce certified recycled pellets for FMCG packaging. The certification provides a local compliance pathway to support EPR rollout for FMCG brands.
The SLUKCC and Sri Lanka High Commission in London held a panel to strengthen Sri Lanka–UK trade ties, urging firms (especially SMEs) to use the UK Developing Countries Trading Scheme, noting relaxed apparel Rules of Origin. The event promoted Sri Lanka Expo 2026, investment opportunities and Colombo real estate projects.
Pathfinder Foundation held a diplomatic dialogue to advance Sri Lanka’s critical minerals sector and agreed to establish an International Study Group on Critical Minerals to drive policy reform and attract FDI. Bogala Graphite (CEO Amila Jayasinghe) participated, with industry calls for regulatory reform, digital licensing and value-added processing.
Sri Lanka Deputy Minister Chathuranga Abeyasinghe met Saudi Vice Minister Khalil bin Ibrahim bin Salamah on 25 Jan 2026 in Riyadh to discuss industrial, chemical and mineral collaboration and both sides agreed to establish a communication channel for follow-up.
Asia's factory activity expanded in January as export orders rebounded, with S&P Global PMIs at 50.3 in China, 51.5 in Japan, 51.2 in South Korea and 51.7 in Taiwan; the surveys point to stronger global demand lifting regional manufacturing.
UNCTAD reports global FDI rose 14% in 2025 to $1.6 trillion, with much of the increase driven by financial flows through global hubs rather than new productive investment. Data centres accounted for over one-fifth of greenfield values (>$270bn) while infrastructure and renewable energy projects fell.
IT & DigitalRenewable EnergyConstruction Activity
Ada Derana·Feb 2, 2026·Promotional / marketingPositive
Sri Lanka opened its first country pavilion at Source Fashion 2026 in London with 20 Sri Lankan apparel booths (including Hayleys Free Zone) to promote UK/EU sourcing. The UK's DCTS zero-duty concessions and relaxed Rules of Origin from 1 Jan 2026 are expected to increase export opportunities for Sri Lankan apparel makers.
Sri Lanka and UK officials and business leaders met in London to push stronger trade and investment ties, urging Sri Lankan firms to use the UK's Developing Countries Trading Scheme (including relaxed apparel Rules of Origin) and promoting Expo 2026. The BOI said Sri Lanka aims for nearly 7% growth by attracting higher-quality investment.
Nishantha Bakmeege was appointed President of the Sri Lanka Chamber of Garment Exporters and pledged policy advocacy to strengthen SME apparel exporters via value addition, digitalisation and regulatory reforms.
ExportersIT & Digital
Ada Derana·Feb 1, 2026·Major contract or order·DIMOPositive
DIMO.N0000 completed the design, supply, installation and commissioning of a 630-fixture LED floodlighting system across six high-mast towers at the Singhalese Sports Club, enabling SSC to host international day–night matches ahead of the ICC Men's T20 World Cup. The system meets ICC illumination standards, supports HD/4K/8K broadcasts and uses DMX centralised controls.
The Colombo market ended lower with the ASPI down 0.37% (88.58 pts) to 23,812.31 amid profit-taking, elevated turnover and net foreign outflows (week net outflow > Rs.2.36bn); daily turnover was about Rs.9.2bn and foreign investors were net sellers (Rs.1.7bn yesterday).
Sri Lanka launched its first country pavilion at Source Fashion London 2026 with 20 booths to boost apparel exports and buyer links; UK’s DCTS zero-duty rules from 1 Jan 2026 are expected to improve market access for Sri Lankan apparel exporters.
National Chamber of Commerce of Sri Lanka will hold a half-day 'Total Quality Management' session on Tuesday 10 February from 09:00–12:30 at the National Chamber Auditorium, led by Sunil G Wijesinha. The seminar covers TQM principles (Kaizen, 5S, quality circles) for managers across manufacturing and services; registration closes 5:00 p.m. on Monday 9 February 2026.
IPS research finds about 70% of green-labelled and 50% of amber-labelled SSBs in Sri Lanka contain non-sugar sweeteners (NSS) and recommends updating SSB policies—including FOPL warnings and extending SSB taxes—to cover NSS and close reformulation loopholes.