Trade Profile

flag Sri Lanka Sri Lanka: Trade Profile

Foreign Trade in Figures

Sri Lanka is relatively open to international trade, which accounts for 41% of GDP (World Bank, latest data available). Nonetheless, its share in GDP has declined almost continuously in the last 20 years after peaking at 88.6% in 2000. The country mainly exports textiles and garments (almost 40% of total exports in 2021), tea (13.7%), rubber products (8.8%), and electrical machinery (2.7%). Its main imports include mineral fuels (15.8%), machinery (8.5%), electrical machinery (8%), and knitted or crocheted fabrics (5.2% - ITC, 2022).

Sri Lankan exports are directed mainly towards the U.S. (24.7% of all exports), the United Kingdom (7.5%), India (6.7%), Germany (6.1%) and Italy (4.7%); whereas imports come chiefly from China (23.7% of all imports), India (22%), the U.A.E. (6.6%), Malaysia (3.8%) and Singapore (3.6%). The country’s trade policy aims to strengthen access to Sri Lankan products on the international market. As such, the Government has signed several bilateral and multilateral trade agreements, especially at the regional level. China and Sri Lanka have been negotiating a free trade agreement. However, while China has been pushing to reach a deal, Sri Lanka stated that they want more time to negotiate the agreement, as the Government is concerned about the economic impact of a rushed deal on its economy (Sri Lanka had demanded a review of the deal after 10 years, to which China did not agree). Therefore, negotiations are currently at a stalemate. For a list of FTAs signed by Sri Lanka, click here. Sri Lankan exports have been traditionally less competitive than those of other countries in the region such as Bangladesh and Vietnam due to higher minimum wage rates. Nevertheless, a rapid fall in the value of the Sri Lankan rupee and a minimum wage hike for the workers of the garment industry in Bangladesh and Vietnam helped to level the playing field.

Sri Lanka has a structural trade deficit. In 2021, merchandise imports reached USD 20.6 billion, while exports totalled USD 12.5 billion, marking an increase of 28.5% and 24.4%, respectively (WTO, 2022). The country is also a net service importer: in 2021, it imported USD 2.4 billion worth of services, against USD 2.9 billion in exports. According to the World Bank, in the same year, the country’s trade deficit widened to 7.4% of its GDP, from 6.1% one year earlier. The latest data from the Central Bank show that earnings from exports in 2022 surpassed USD 13 billion for the first time, recording an increase of 4.9% from the previous highest recorded in 2021. Meanwhile, total import expenditure amounted to USD 18.29 billion, recording a year-on-year decline of 11.4%, resulting from measures to restrict non-urgent imports and liquidity constraints that prevailed in the market for most of the year. As a result, the deficit in the trading account in 2022 narrowed to the lowest level since 2010 to USD 5.18 billion.

 
Foreign Trade Indicators 20172018201920202021
Imports of Goods (million USD) 20,98022,23319,93716,05520,637
Exports of Goods (million USD) 11,36011,89011,94010,04712,499
Imports of Services (million USD) 6,4516,7566,5423,9142,953
Exports of Services (million USD) 7,7268,3407,4533,0092,475
Imports of Goods and Services (Annual % Change) 73-4-204
Exports of Goods and Services (Annual % Change) 852-3010
Trade Balance (million USD) -9,619-10,343-7,997-6,008n/a
Foreign Trade (in % of GDP) 4750493741
Imports of Goods and Services (in % of GDP) 2728282124
Exports of Goods and Services (in % of GDP) 2021221517

Source: WTO – World Trade Organisation ; World Bank - Latest available data.

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Main Partner Countries

Main Customers
(% of Exports)
2022
United States 25.5%
United Kingdom 7.4%
India 6.7%
Germany 5.8%
Italy 5.0%
See More Countries 49.6%
Main Suppliers
(% of Imports)
2022
India 26.4%
China 20.0%
United Arab Emirates 5.5%
Malaysia 5.2%
Singapore 4.2%
See More Countries 38.7%

Source: Comtrade, Latest Available Data

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Main Products

13.6 bn USD of products exported in 2022
Tea, whether or not flavouredTea, whether or not flavoured 9.6%
Women's or girls' slips, petticoats, briefs,...Women's or girls' slips, petticoats, briefs, panties, nightdresses, pyjamas, négligés, bathrobes, dressing gowns, housecoats and similar articles, knitted or crocheted (excl. t-shirts, vests, brassieres, girdles, corsets and similar articles) 5.2%
Brassieres, girdles, corsets, braces, suspenders,...Brassieres, girdles, corsets, braces, suspenders, garters and similar articles and parts thereof, of all types of textile materials, whether or not elasticated, incl. knitted or crocheted (excl. belts and corselets made entirely of rubber) 4.8%
T-shirts, singlets and other vests, knitted or...T-shirts, singlets and other vests, knitted or crocheted 4.8%
Women's or girls' suits, ensembles, jackets,...Women's or girls' suits, ensembles, jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (excl. knitted or crocheted, wind-jackets and similar articles, slips, petticoats and panties, tracksuits, ski suits and swimwear) 3.9%
See More Products 71.7%
17.6 bn USD of products imported in 2022
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 17.0%
Fabrics, knitted or crocheted, of a width of > 30...Fabrics, knitted or crocheted, of a width of > 30 cm (excl. warp knit fabrics "incl. those made on galloon knitting machines", those containing by weight >= 5% of elastomeric yarn or rubber thread, and pile fabrics, incl. "long pile", looped pile fabrics, labels, badges and similar articles, and knitted or crocheted fabrics, impregnated, coated, covered or laminated) 3.3%
Knitted or crocheted fabrics, of a width > 30 cm,...Knitted or crocheted fabrics, of a width > 30 cm, containing by weight >= 5% of elastomeric yarn or rubber thread (excl. pile fabrics, incl. "long pile", looped pile fabrics, labels, badges and similar articles, and knitted or crocheted fabrics, impregnated, coated, covered or laminated) 2.4%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 2.2%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.1%
See More Products 73.0%

Source: Comtrade, Latest Available Data

 

To go further, check out our service Import Export Flows

 
 

Main Services

Source: United Nations Statistics Division, Latest Available Data

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Commercial Policy

International Economic Cooperation
Member of the World Trade Organization (WTO)
Member of South Asian Association for Regional Cooperation (SAARC). The country have signed a trade agreement with 21 other countries in the São Paulo Round of the Global System of Trade Preferences among Developing Countries (GSTP).
Assessment of Commercial Policy
Sri Lankan Commercial Policy
Barriers to exchanges
Average Customs Duty (Excluding Agricultural Products)
11.01%
 
 

Trade Compliance

International Conventions
Member of the World Trade Organization (WTO)
International Economic Cooperation
Member of South Asian Association for Regional Cooperation (SAARC). The country have signed a trade agreement with 21 other countries in the São Paulo Round of the Global System of Trade Preferences among Developing Countries (GSTP).
Useful Resources
Sri Lanka Customs
 
 
 

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Latest Update: September 2023