News & market updates

The National Chamber of Exporters warns labour shortages are hurting Sri Lanka's export sector and urges urgent action; 143,087 Sri Lankans have left for overseas employment in 2026 so far and the SLBFE aims to secure 250,000 placements this year. Labour force participation is 49.2% and unemployment 3.7%.

The Export Development Board is intensifying efforts to expand Sri Lanka's graphite industry to boost mineral export revenue, including a field visit to Bogala Graphite Lanka PLC to review mining, processing and value-add operations. The drive aims to enhance market access, R&D and partnerships under the NEDP.

Sri Lanka's current account swung to a $245m deficit in 1H 2026 from a $1.4bn surplus a year earlier as the merchandise trade deficit widened 67% to $5.49bn (exports $6.9bn, imports $12.4bn). Higher fuel imports (1H fuel bill $3.17bn, +58.8% YoY), a weaker services surplus and Middle East-related import pressures drove the deterioration; gross official reserves were $6.5bn and the rupee was 7.8% weaker YTD.

Government warns AI is changing the economics of Sri Lanka's software exports and urged the industry to shift from selling engineering hours to products, intellectual property and higher-value services to meet a $5 billion digital export target by 2030, following a validation workshop on a proposed roadmap.

Sri Lanka's monthly current account deficit widened to $149mn in June 2026 (third consecutive monthly deficit), leaving a H1 cumulative deficit of $245mn versus a surplus in H1 2025. The merchandise trade gap widened as import expenditure (fuel imports +40.2% YoY) outpaced export growth, tourist earnings fell and remittances rose; official reserves were $6.5bn and the rupee had depreciated 7.8% YTD by end-July.

EDB Chairman Mangala Wijesinghe said Sri Lanka generated nearly $9bn in exports in H1 2026, targets $19bn for 2026 and $36bn by 2030 under the National Export Development Plan, promoting sectors such as electronics, F&B, IT and logistics and announcing Sri Lanka Expo 2027 (Jan 14-17).

Intex-InMac Sri Lanka 2026 will be held at BMICH from 5-7 August, featuring 250+ exhibitors from over 15 countries showcasing textiles, fabrics and next‑generation garment machinery including AI-enabled systems. The event aims to attract buyer delegations from 12+ countries to boost international sourcing, technology partnerships and Sri Lanka's apparel exports.

CHEC Port City Colombo is pitching its 2.7 sq km SEZ to attract Indian investors, allowing Indian firms to register as offshore companies and transact in Indian rupees; the plan includes four dedicated hospitality plots, a two-km beach and a 90-hectare lagoon.

The Ministry of Digital Economy and GovTech held a national workshop on 31 July to review and build stakeholder consensus on a strategic roadmap to boost Sri Lanka's digital export earnings to US$5 billion by 2030. The roadmap, developed with KPMG and World Bank support, will be refined with industry feedback and include priority actions and timelines.

FCCISL congratulated the Export Development Board after Sri Lanka's combined merchandise and services exports reached $9,012.24 million in Jan-Jun 2026, an 8% year-on-year increase. FCCISL praised EDB chair Mangala Wijesinghe's leadership and called for continued public-private cooperation to sustain export growth and foreign-exchange earnings.

Registrations are open for the Sri Lanka Economic and Investment Summit 2026, to be held on 12-13 Oct at the Shangri-La Colombo. The Ceylon Chamber says the two-day forum will bring government, business and investors together to discuss economic policy, reform, investment and ways to expand exports.

ADB will deploy $450 million to help Cambodia and Sri Lanka-$250m for Cambodia's RISE program and $200m (including $100m additional financing) for Sri Lanka's Trade, Investment and Industry Development Program. Measures include income support for over 1 million Cambodian households, promotion of clean energy and reforms to boost Sri Lankan trade, investment and export diversification.

ADB will deploy $450m regionally and provide a $200m policy-based loan to Sri Lanka (including $100m in additional financing) to help shield the economy from the Middle East conflict. The program backs reforms to modernise trade systems, boost SME competitiveness, attract investment and diversify exports.

The Sri Lanka, France Business Council held its 22nd Annual General Meeting in Colombo and elected Shaameel Mohideen (Spillburg Holdings) as President and Zafir Hashim (John Keells Holdings PLC) as Senior Vice President. Representatives from Aitken Spence and Diesel & Motor Engineering were also elected to the council committee.

ADRA Ceylon is shifting from conventional bulk tea exports to a solutions-provider model offering private-label manufacturing, customised blends, bubble-tea bases and wellness infusions to capture higher-value global markets and support stronger export earnings for Sri Lanka's tea sector.

The Sri Lanka Pharmaceutical Manufacturers' Association (SLPMA) at its AGM reaffirmed the need for a national strategic roadmap to build pharmaceutical self-reliance and global competitiveness, noting a ~USD 600m market and local firms supplying just 5% of private demand. Dinesh Athapaththu was elected SLPMA president and the association urged predictable policy and transitional measures, including the Guaranteed Buyback Scheme, to attract investment and expand exports.

EDB's National Packaging Centre ran a workshop on cinnamon packaging and EU PPWR compliance on 22 July, attended by nearly 100 participants. The session stressed PPWR enforcement (in force 11 Feb 2025; fully enforced 12 Aug 2026) and urged exporters to eliminate PFAS/heavy metals, prepare Declarations of Conformity and register under EPR schemes.

A 31-member Indian Chamber of Commerce delegation concluded a three-day visit to Sri Lanka to explore trade and investment opportunities, meeting government officials and firms including Hayleys PLC and signing two MoUs to strengthen export and investment cooperation.

The Sri Lanka-China Business Cooperation Council (SLCBCC) has partnered with Intex-InMac Sri Lanka 2026 to boost Sri Lanka-China textile trade and industry collaboration. The show runs 5-7 Aug 2026 at BMICH with over 250 exhibitors, including 130 Chinese firms, plus B2B meetings and workshops.

Fitch Ratings says the U.S. effective tariff rate fell to 7.4% from 9.4% after the temporary Section 122 surcharge was replaced by new Section 301 tariffs and because of changing trade flows. Electronics/semiconductor imports rose to about $800bn (from $340bn) while imports from China fell 43%.

SLPMA President Dinesh Athapaththu urged the government to establish a stable, long-term pharmaceutical buyback scheme to attract investment and expand domestic pharmaceutical manufacturing. He also called for streamlined raw-material import approvals and consistent investment incentives to cut delays, lower costs and boost innovation and exports.

Sri Lanka is accelerating intellectual property reforms, digitisation and enforcement to boost US trade and investment. NIPO says historical records have been digitised and aims to reduce patent registration times to around eight months by mid-2027.

EDB's National Packaging Centre and the Export Agriculture Division ran a workshop on 22 July 2026 for nearly 100 participants on cinnamon packaging and compliance with the EU Packaging and Packaging Waste Regulation (PPWR), fully enforced from 12 Aug 2026. Presenters urged exporters to eliminate PFAS and heavy metals, prepare EU Declarations of Conformity, ensure operator identification and register under EPR schemes.

COYLE and the Indian Chamber of Commerce (Tamil Nadu) signed a Memorandum of Understanding in Colombo to formalise a strategic partnership to expand bilateral trade, investment and business collaboration. The MoU creates a framework for trade promotion, investment facilitation, business matchmaking and knowledge exchange under the India-Sri Lanka Bilateral Trade Delegation.

The Canadian Chamber of Commerce in Sri Lanka held a "Canada Day Dialogue" to map new pathways for bilateral trade, investment and tourism, noting Canada's CAD 500 billion Indo‑Pacific commitment could create opportunities across energy, technology, manufacturing and tourism. Panelists said Sri Lanka could target roughly $2.4bn in two‑way trade and attract up to about $400m in Canadian investment if structural bottlenecks are removed.

Colombo Dockyard (DOCK.N0000) signed a contract with Global Marine Systems (UK) to build a 100m cable laying and repair vessel, due for delivery in September 2029. The ultra-modern diesel-electric vessel (14.5 kn) accommodates 76, has three cable tanks and meets Bureau Veritas CLEANSHIP standards.

SLAMERP welcomed the USTR decision to apply a 10% tariff to Sri Lanka under Section 301, saying the outcome preserves the competitiveness of Sri Lankan rubber products in the US market. The association credited sustained government engagement for securing the lower rate.

Sri Lanka's apparel sector must close compliance and utilization gaps ahead of re-applying for the EU's GSP+ under tougher rules effective Jan 1, 2027; the industry's GSP+ utilization is only 49-59%. The World Bank's July 2026 reclassification to upper-middle-income and stricter EU enforcement increase urgency to boost domestic fabric capacity and show demonstrable reforms or risk losing preferences.

Oil prices fell over $1/bbl after the US and Iran paused attacks, with Brent down $1.47 (1.66%) to $86.89 and WTI down $1.45 (1.76%) to $81.16, their lowest since July 20. Analysts warn supply risks remain as Red Sea traffic has dropped and tensions could resume.

SLPMA President Dinesh Athapaththu urged a national policy push to transform Sri Lanka's pharmaceutical manufacturing into a major export industry, calling for a multi-stakeholder task force, faster regulation and investment incentives. He outlined five strategic priorities including quality, innovation, skills collaboration and building a supporting pharma ecosystem.