News & market updates

Sri Lanka hosted a pavilion at the 73rd Bangkok Gems & Jewelry Fair with 60 Sri Lankan companies occupying 75 booths. The participation showcases Ceylon gemstones and aims to boost exports and trade ties with Thailand and the wider ASEAN market.

The Sri Lanka Export Development Board led a 19-member delegation of giftware & lifestyle SMEs to the IHGF Delhi Fair Spring 2026 (14–18 Feb) and held networking sessions in Mumbai to build buyer links and boost export-readiness through design and production exposure.

Gapstars Group was formally launched at Scale Up 2026 in Colombo (2–6 Feb 2026), marking ten years of Gapstars building Sri Lankan embedded teams and expanding its finance capability alongside technology. The working summit with 50+ international partners emphasised scaling integrated tech and finance teams.

Gapstars marked its 10th anniversary in Colombo and launched Gapstars Group to scale its technology and finance delivery, with over 50 international partners attending. The event included AI workshops and formalised a finance vertical embedding Sri Lankan teams into European partners' reporting, compliance and forecasting functions.

President Trump defended sweeping tariffs and said they could replace income tax; after a Supreme Court setback he signed a new 15% global tariff order (limited to 150 days) to take effect almost immediately.

EDB Chairman Mangala Wijesinghe said Sri Lanka's apparel and textile sector is forecast to generate $5.5 billion in export revenue in 2026. January exports fell 2.82% YoY to $447.25m, but the EDB expects a rebound and aims to expand value-added shipments via DCTS, EU GSP+ and reduced US tariffs.

The Cabinet approved a cooperation agreement between the Sri Lanka Export Development Board and the German Import Promotion Bureau to boost Sri Lankan exporters' access to German and wider European markets. The pact targets natural raw materials and IT outsourcing exporters, offering technical guidance, market intelligence and capacity-building for SMEs and women-led businesses.

Economist Talal Rafi urged a disciplined shift from stabilisation to growth, calling for trade and productivity-driven reforms alongside fiscal discipline and reserve accumulation. He noted debt-to-GDP has fallen to near 100%, IMF growth at ~2.9% (this year)/3.1% (next) and reserves projected to rise to ~$8.8bn by year-end.

Cabinet approved the updated National Tariff Policy on 3 November 2025 to amend tariff rules for legal compliance and resolve implementation issues; the changes aim to improve consistency in tariff application, reduce ambiguities and support broader macroeconomic objectives.

Insurance Regulatory Commission reports total Gross Written Premium reached Rs. 283,613 million in Q3 2025, up 19.48% y/y (long-term +25.06%). Total assets rose to Rs. 1,350,481 million (+15.97% y/y) and sector Profit Before Tax was Rs. 37,380 million in Q3.

The US Supreme Court struck down IEEPA-based tariffs on 20 Feb, cutting the US effective tariff rate from about 13% to ~5–6%; the administration quickly imposed a temporary 10% (then 15%) global tariff under Section 122, leaving trade and fiscal uncertainty including possible $240bn in lost IEEPA revenues and questions over refunds.

Russel’s Wellness showcased Ayurveda-inspired wellness teas and medicinal formulations at Gulfood 2026, attracting strong interest from global importers and a visit by the Hon. Minister, signalling growing international recognition for Sri Lanka’s heritage wellness sector.

The Export Development Board says Sri Lanka will host what is expected to be the country’s largest investment forum on June 10 to connect local exporters with global investors and buyers and expand export opportunities.

The Sri Lanka Export Development Board held a virtual meeting with New Zealand and Sri Lankan high commissions and business representatives to promote Sri Lanka Expo 2026 and boost bilateral trade. Sri Lanka's exports to New Zealand were about USD 31.24m in 2025, led by tea, garments, rubber and edible preparations.

Lihini Sea Foods (Pvt) Ltd won the Gold Award in the Extra Large Category – Fisheries & Fishery Products Sector at the 33rd NCE Export Awards 2025. The company runs a ~175 mt/month processing facility, has expanded value-added seafood ranges and holds certifications including BRC “AA”, IFS, HACCP and FDA.

Foreign Minister Vijitha Herath will visit Germany on 26-27 February 2026 to attend the OAV Bremen Chapter's 125th anniversary as Guest of Honor and keynote speaker and to hold meetings and a business roundtable on trade and foreign employment for Sri Lanka.

MAS Holdings has ceased garment operations at its Methliya plant as part of a restructuring; Opposition Leader Sajith Premadasa warned about 26,000 potential job losses, while MAS and the Export Development Board say workers were offered transfers, relocation support or above-statutory compensation.

Sri Lanka showcased plans at the India International Seaweed Expo 2026 to scale seaweed farming from small-scale cultivation to value-added processing and export-oriented supply chains. Officials and experts flagged needs for investment, species diversification, infrastructure and measures to manage climate and operational risks.

Cabinet approved an updated National Tariff Policy on Nov 3, 2025 after a comprehensive review to improve compliance, clarity and alignment with current economic and fiscal conditions; the revised framework is expected to enhance trade policy coherence and support fiscal objectives.

Sri Lanka’s export earnings in January 2026 rose 13.71% y/y to US$ 1,532.6 Mn. Merchandise exports increased 10.66% (US$ 1,165.02 Mn) and services grew 24.59% (US$ 367.55 Mn), with strong gains in tea, coconut products, electrical/electronics and ICT/BPM, while apparel and gems/jewellery fell.

The U.S. Supreme Court on Feb 20 ruled the president cannot use IEEPA to impose broad tariffs, cutting the U.S. effective tariff rate from ~13% to about 5–6% and removing roughly USD240bn of IEEPA-based annual tariff revenue. The administration has imposed a temporary 15% global tariff under Section 122, creating ongoing trade, fiscal and refund uncertainty.

IMF Resident Representative Dr. Martha Woldemichael said sustaining reform momentum is critical for Sri Lanka to move from crisis stabilisation to transformation, noting four of eight EFF reviews completed and about $1.74bn disbursed. She urged trade liberalisation, digitalisation, labour-market reform, fiscal credibility and Central Bank independence to bolster investor confidence; reserves stood at $6.8bn and inflation was 2.3% YoY in Jan 2025.

Asian stocks slipped after a Wall Street selloff driven by uncertainty over U.S. tariff policy and AI-related risks; MSCI's Asia-Pacific ex-Japan index was down about 0.2%.

Gulf Air has increased flights between Bahrain and Colombo to 10 per week (including double daily services on Tuesdays, Thursdays and Fridays) to meet strong Ramadan and Eid travel demand. The expanded schedule also increases cargo capacity, benefiting exporters and logistics.

Batik Air will relaunch Colombo–Kuala Lumpur flights from 30 March with four weekly services, restoring direct connectivity. Officials say the route will support tourism, trade and export cargo flows, and Malaysia aims to increase Sri Lankan arrivals by 10–15% in 2026.

UK DCTS reforms (effective 1 Jan 2026) allow Sri Lankan apparel makers to source fabrics globally and export duty-free to the UK, expected to lift production by over 10% and boost export volumes; delegation visited logistics and QA facilities, including Aitken Spence-supported operations.

EDB held a specialised "Beyond Borders" training for potential exporters and SMEs on Incoterms, risk management and strategies for international competitiveness. The EDB said a five-year National Export Development Plan is being drafted and noted SME direct exports are under 5% (vs >25% in peers).

Gulf Air will increase flights between Bahrain and Colombo from daily service to 10 weekly flights from 19 February 2026. The added frequencies target Ramadan/Eid travel demand and expand cargo capacity, improving connectivity for passengers and exporters.

Wall Street futures and the dollar fell after confusion over new U.S. tariffs — including a surprise shift to a 15% global rate — revived 'sell America' flows. Nvidia's upcoming results will test the AI sector, while gold rose, oil eased and Treasury moves raised concerns about a roughly $170bn revenue hit that could widen the fiscal deficit.