News & market updates

The Science and Technology Ministry opened the 'Harvest Centre' technology incubation centre at the University of Ruhuna Faculty of Agriculture to support agribusiness and food-technology startups in the Southern Province. The centre will provide lab testing, packaging advice and technical and management support to help SMEs add value and access domestic and export markets.

Sri Lanka's tea industry may lose USD 10-15 million per week as the Middle East conflict has halted shipments to the region. About 52% of exports go to the Middle East; auction prices fell ~Rs.50/kg overall and ~Rs.75/kg for low-grown tea, and exporters are seeking government support for cash-flow and added freight/insurance costs.

Sri Lanka opened the 15th Textile Series exhibition at SLECC to link international textile technology suppliers with local apparel manufacturers, with the sector's exports around $5 billion. Officials and industry bodies emphasised technology adoption, innovation, tariff reforms and use of international funding to boost competitiveness and higher-value production.

JAT Holdings PLC completed the second-phase expansion of its binder plant, increasing production capacity by 76% and bringing the facility into full operation. The upgrade is intended to support growth in emulsions and coatings, reduce import reliance, and improve cost predictability and FX exposure.

President Anura Kumara Dissanayake convened high-level meetings to review economic risks from the Middle East conflict and ordered monitoring and contingency measures for fuel supplies, tourism, exports and migrant workers. He also asked the Finance Ministry to study a technology-sector investment relief package.

Norway's Deputy Foreign Minister Andreas Motzfeldt Kravik urged rule-of-law and investment-climate reforms to attract Norwegian capital and signalled plans to deepen trade, maritime cooperation, fisheries monitoring, renewable-energy and technology partnerships with Sri Lanka.

Cabinet approved phased removal of cess on 2,634 import Combined Classification Codes over 2026–2029, with cuts staged at 25%, 50% up to 100% (265 textile-related goods to see removal in 2026; 697 intermediate goods phased 2026–28). The measure is aimed at lowering production costs, easing exporters' cost pressures and improving supply-chain efficiency.

Fitch says Middle Eastern sovereign ratings broadly have buffers to withstand a short regional conflict if it lasts under a month and energy infrastructure avoids lasting damage. It warns closure of the Strait of Hormuz or damage to Gulf export infrastructure would be the main channel for rating pressure and expects temporary slowdowns in tourism, aviation and consumer activity.

Saliya Pieris warned Sri Lanka faces economic fallout from the Middle East war, citing rising global oil prices and curtailed gas output, FX volatility, potential drops in European and Middle Eastern tourist arrivals, disruptions to tea exports and risks to remittances, and urged early policy responses.

Government unveiled structural reforms at the AmCham CEO Forum aiming for 7% annual growth and a LKR 200 billion economy, including a 70% renewable-energy target by 2030, bank consolidation, port upgrades and support for IT, pharma and SME finance (LKR 300m ITIA allocation).

Innox Holdings won the Excellence Award for Innovation at Architect 2026 for its uniquely designed, interactive stall. The company, an exclusive distributor for several global glass brands, says it plans to expand across Sri Lanka and into the Maldives and Seychelles.

Senior bankers at the Association of Professional Bankers convention urged caution, prioritising balance-sheet discipline—liquidity, capital buffers, and managing interest-rate and FX exposure—over rapid expansion. Speakers also highlighted selective growth, risk-adjusted returns, and greater use of digital capability and sustainable debt instruments.

The Sri Lanka Export Development Board held a Regional Exporters Networking Forum in Matara to identify Southern Province exporters' challenges and explore new export opportunities, with nearly 250 exporters and senior officials participating. The EDB collected issues beforehand to focus discussions and aims to reduce regional export disparities.

The Sri Lankan Embassy and BELGOLUX–Sri Lanka Business Council held a business evening in Brussels on 24 Feb 2026 with over 55 Belgian participants to promote trade and investment, highlighting opportunities in ports, logistics and tourism. A BELGOLUX business delegation to Sri Lanka is scheduled for 17–21 June 2026 including a forum, B2B meetings, Expo participation and a Colombo Port City visit.

Hambantota International Port commissioned a new six-hectare RoRo yard (Stage I of Phase II), increasing vehicle parking to 4,500 units per terminal to speed vessel turnarounds. HIP handled 726,153 vehicles in 2025, is targeting ~1 million annual RoRo capacity, and has Stage II due in Q2 with two new NYK services announced.

President Anura Kumara Dissanayake led a high-level discussion to assess the potential impact of the Middle East war on Sri Lanka’s economy and instructed urgent measures, including a relief package to promote investment in modern technology and data centres. Officials reviewed risks to fuel and gas supplies, stockpiles, tourism, ports, food security and inflation.

Sri Lanka's cabinet approved removing cess on 2,634 imported goods in stages through to 2029, phasing para-tariffs from 25% to 50% and up to 100%, while saying domestic industries will be protected.

Fitch says a prolonged Iran conflict disrupting Gulf energy and shipping would lift prices and cash flows for upstream APAC energy exporters while squeezing margins and working capital for downstream refiners, chemicals, fertiliser and some metals producers. Australian and Indonesian exporters and gold miners are likely near-term beneficiaries, while refiners with regulated fuel prices face heightened cash-flow risk.

The IMF said on 3 April that Middle East tensions are disrupting trade, triggering surges in energy prices and financial-market volatility and raising global uncertainty; it will provide a fuller assessment in the April World Economic Outlook.

First Capital Research says March 2026 Iran conflict risks could push Brent to $95–110/bbl and raise Sri Lanka's inflation, external deficits and market volatility, complicating monetary policy. It notes shipping diversions may boost Colombo's transshipment role and that equity corrections could offer selective entry points.

Fitch assigned a National Long-Term Rating of 'AAA(lka)' to Hayleys PLC’s proposed unsecured senior redeemable debentures of up to Rs. 7 billion. Fitch said the rating is in line with Hayleys’ national rating but noted subsidiary debt/EBITDA rose to 2.9x in 3QFY26 (vs a 2.5x threshold) and is expected to moderate.

Seylan Bank PLC fully disbursed Rs. 1.2 billion under the government Seylan Atha Hitha MSME loan programme in 2025 and has received a Rs. 1 billion allocation for the first tranche of 2026. Loans of up to Rs. 25 million are offered at a concessional 5% p.a., with tenors up to 10 years and an 80% credit guarantee for eligible women-led enterprises.

Sierra Cables PLC posted nine-month revenue of Rs. 12 billion (up 68% y/y) and profit for the period of Rs. 2.1 billion (up 105%), with EPS rising to Rs. 3.88. The company, now a 2025 subsidiary of Browns Investments, expanded exports, earned UL 44 certification and retained a Fitch A+ (lka) rating.

The EDB chairman and Sri Lanka's Foreign Minister held a business promotion programme in Bremen on 27 Feb 2026 to promote Sri Lanka Expo 2026 (18–21 June) and invite German businesses to participate. Discussions focused on export and investment prospects, logistics, tourism and follow-up virtual engagement.

LAUGFS Rubber won the Gold Award for the fifth consecutive year in the Extra-Large Category (Rubber Tyres & Accessories) at the NCE Export Awards 2025, recognising strong export sales growth and expansion into new international markets.

The Sri Lanka Export Development Board unveiled 'Edges of Sri Lanka' national branding alongside the official launch of Sri Lanka Expo 2026 to showcase the country's export and investment value proposition; the Expo will run 18–21 June 2026 at BMICH, Colombo.

AmCham Sri Lanka CEO Forum 2026 convened 200+ leaders calling for reforms to restore economic confidence, targeting 7% annual growth and a 70% renewable-energy share by 2030. Panels highlighted SME support measures (Rs.300m, 'Level Up'), banking consolidation, infrastructure/port upgrades and FDI-attracting reforms.

Sri Lanka's rubber sector faces mounting cost, demand, disease and labour pressures, with 2025 rubber export earnings down to about USD 945m from ~USD 1.01bn in 2024. Removal of SVAT, a 15% wage rise, disease outbreaks and higher energy costs have suppressed prices, cut replanting and threaten long-term viability without policy support.

Sri Lanka's external current account recorded a $369.7m surplus in January 2026, up 271% YoY, driven by 9.1% export growth, strong remittances and a narrower trade deficit. Gross official reserves were $6.8bn, foreign inflows into gov't securities were $16.6m while CSE saw a $21.9m net outflow; the LKR was 0.2% stronger YTD to end-February.

The Central Bank of Sri Lanka will issue a review report tomorrow assessing the potential impact of the ongoing Middle East crisis on Sri Lanka’s economy, the president told Parliament; the evaluation aims to clarify possible effects on the country’s financial sector.