Introduction

The Democratic Socialist Republic of Sri Lanka (known as

Ceylon before 1972) is a tropical island nation off the
southeast coast of the Indian subcontinent. The island was
known in ancient times as Lanka. During colonization, the
island became known as Ceylon, a name still used on
occasion. Its unique shape and proximity to the Indian
mainland have led some to refer to the island as India's
teardrop. Sri Lanka is developing country in the South Asia.
A diverse country accommodates many religions, ethnicities
& languages. Sri Lanka is Rich with vast bio diversity
Trading environment
Main export partners (2020) Main import partners (2020)
USA 25.29% China 22.96%
UK 9.18% India 19.30%
India 6.09% UAE 5.57%
Germany 5.75% Malaysia 4.08%
Italy 5.35% Singapore 3.96%
Sri Lanka have exports of 15 billion in 2021 in which export goods are Textiles and apparel, tea and
spices, electronics, IT services, rubber manufactures, fish, precious stones. Imports of Sri Lanka
were 20.6 billion in 2021, Import goods were :- Mineral fuels including petroleum product (12.3%),
Machinery including computers (9%), Electrical machinery, equipment, Vehicles (7.1%), Textile
fabric (5%), Plastics (3.7%), Cotton (3.3%), Heavy metals (3%), Ships and boats (2.8%), Iron, steel,
aluminum (2.8%)
 Trading Environment

• Regional Economic Integration: Regional FTA’s Sri Lanka

has existing bilateral FTAs with India, Pakistan, and
Singapore which aim to lower trade barriers and support
cross region relations Sri Lanka is also part of the South
Asian Association for Regional Cooperation (SAARC)
which comprises Sri Lanka, Bangladesh, Bhutan, Nepal,
India, Maldives, and Pakistan and aims to reduce trade
barriers between the countries.
Tariff and trade barriers
Tariff rate:
Sri Lanka tariff rates for 2019 was 13.30%, a 1.22% increase from 2018.
Sri Lanka tariff rates for 2018 was 12.08%, a 3.36% increase from 2017.
Sri Lanka tariff rates for 2017 was 8.72%, a 4.29% increase from 2015.
Sri Lanka tariff rates for 2015 was 4.43%, a 2.66% decline from 2014.

Non-tariff barriers: The Sri Lanka Government has liberalized import and export procedures. Import
licenses are required for only a few specified items due to health and security reasons.

Firearms And Ammunition Precious Toxic And Hazardous Meats

Metals Chemicals
Drugs And Pharmaceutical Alcohol Pesticides Fresh Produce.
Products
Government incentives for conducting business in Sri Lanka

Through the BOI and other relevant Government agencies, foreign

businesses in Sri Lanka are provided with additional benefits to
operating in the Sri Lankan economy.

• Duty Free Facilitation

• Access to BOI Zones

• Investment Protection

• Enhanced Capital Allowance

• Headquarter Relocation Incentives

Guidelines for doing business in Sri Lanka

Do’s:
• Consider Sri Lanka’s strategic location and demographic structure
• A reliable business professional who can assist
• Liaise with the BOI about concessions that foreign businesses may be entitled to
• Create marketing material
• Employ an efficient company secretary
• Work closely with local parties
• Sri Lankans have a formal business attitude. Give a firm handshake. When greeting a
woman, wait until she initiates a handshake
• The exchange of business cards is as usual. Always hand your card over with both hands
Don’ts:
Do not begin operations without fully understanding the market,
Do not ignore the local market, especially for consumer products
Considerations
• Trust, loyalty, and Respect:
• Time constraint is very important for businessman. So there should
be advance arrangement of meetings and all related
trading and industrial activities are not permitted
• Pawn brokering
• Coastal fishing
• Growing and primary processing of tea, rubber, coconut and rice
• Mining and primary processing of non-renewable national
resources