flag Sri Lanka Sri Lanka: Trade Profile

Foreign Trade in Figures

Sri Lanka is relatively open to international trade, which accounted for 40% of GDP in 2020 (World Bank, 2022). 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 (over 40% of total exports in 2020), tea (11.3%), rubber products (over 7%), and refined petroleum (2.1%). Its main imports include refined petroleum (7.9%), textile and textile articles (over 14%), ande crude petroleum with 2.4% (OEC, 2022). In 2020, the COVID-19-led global crisis took its toll on the Sri Lankan international trade too, with exports falling an estimated 19.9% and imports dropping by 13.2% (IMF). As the conjuncture is expected to gradually improve during 2021, both exports and imports should rebound (+33% and +24.1%, respectively).

Sri Lankan exports are directed towards the U.S. (23% of all exports), the United Kingdom (8.1%), India (6.5%), Germany (6%) and Italy (4.1%); whereas imports come chiefly from China (24.7% of all imports), India (20.5%), the U.A.E. (5.7%), Malaysia (4.2%) and Singapore (4%). The country’s trade policy aims to strengthen access for 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 demand for a review of the deal after 10 years, to which China did not agree). Therefore, negotiations are currently in a stalemate. 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 2020, merchandise imports reached 16.2 billion USD, while exports totalled 11.3 billion USD (OEC, 2022) resulting in a deficit of 4.9 billion USD.

More recently, Sri Lanka’s trade deficit widened to USD 1089 million in January of 2022 from USD 562 million a year ago. Imports surged 46.8% from a year earlier to a record high of USD 2241 million, on higher purchases of intermediate goods (58.2%), namely fuel (88.2%), textiles and textile articles (27%) and base metals (457%). Also, shipments rose for consumer goods (28%), in particular medical and pharmaceutical products (133.7%) and investment goods (36.1%), namely machinery and equipment (45.7%). Meanwhile, exports rose by a softer 20 percent to USD 1156 million, boosted by sales of industrial products (21.3%), mainly textiles and garments (18%), agricultural products (14.3%) and minerals with 8.8% (Central Bank of Sri Lanka, 2022).

 
Foreign Trade Indicators 20162017201820192020
Imports of Goods (million USD) 19,19020,98022,23319,93716,055
Exports of Goods (million USD) 10,34011,36011,89011,94010,047
Imports of Services (million USD) 6,1996,4516,7566,5423,914
Exports of Services (million USD) 7,1387,7268,3407,4533,009
Imports of Goods and Services (Annual % Change) 872-6-11
Exports of Goods and Services (Annual % Change) -1807-10
Trade Balance (million USD) -8,873-9,619-10,343-7,997n/a
Foreign Trade (in % of GDP) 5051545240
Imports of Goods and Services (in % of GDP) 2829302923
Exports of Goods and Services (in % of GDP) 2122232317

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

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Main Partner Countries

Main Customers
(% of Exports)
2021
United States 24.7%
United Kingdom 7.5%
India 6.7%
Germany 6.1%
Italy 4.7%
See More Countries 50.3%
Main Suppliers
(% of Imports)
2021
China 23.7%
India 22.0%
United Arab Emirates 6.6%
Malaysia 3.8%
Singapore 3.6%
See More Countries 40.2%

Source: Comtrade, Latest Available Data

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Main Products

13.3 bn USD of products exported in 2021
Tea, whether or not flavouredTea, whether or not flavoured 10.4%
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) 5.2%
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) 5.1%
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, knitted or crocheted (excl. wind-jackets and similar articles, slips, petticoats and panties, tracksuits, ski suits and swimwear) 4.2%
T-shirts, singlets and other vests, knitted or...T-shirts, singlets and other vests, knitted or crocheted 4.1%
See More Products 71.1%
21.5 bn USD of products imported in 2021
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 9.9%
Telephone sets, incl. telephones for cellular...Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528) 3.0%
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) 2.7%
Semi-finished products of iron or non-alloy steelSemi-finished products of iron or non-alloy steel 2.4%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 2.3%
See More Products 79.7%

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 World Trade Organisation
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 World Trade Organisation
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
National Organisation of Intellectual Property
Visit the website of the National Intellectual Property Office of Sri Lanka
 
 
 

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Latest Update: October 2022