Sri Lanka is relatively open to international trade, which accounts for 47% 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 tea (9.6%), women's or girls' slips, petticoats, briefs (5.2%), brassieres, girdles, corsets, braces, suspenders (4.8%), t-shirts, singlets, and other vests, knitted (4.8%), and women's or girls' suits, ensembles, jackets (3.9%), with textiles as a whole being the main commodity group. Its main imports include petroleum oils and oils obtained from bituminous (19.2%), fabrics, knitted or crocheted (5.7%), medicaments (2.1%), and coal (1.8% - data Comtrade 2022).
Sri Lankan exports are directed mainly towards the United States (25.5%), the United Kingdom (7.4%), India (6.7%), Germany (5.8%), and Italy (5.0%); whereas imports come chiefly from India (26.4%), China (20.0%), United Arab Emirates (5.5%), Malaysia (5.2%), and Singapore (4.2% - data Comtrade 2022). 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 2022, merchandise imports reached USD 18.3 billion (-11.3% y-o-y), while exports totaled USD 13.1 billion, marking an increase of 4.8% (WTO). With the recovery of the tourism industry, the country became a net service exporter: in 2022, it imported USD 2.8 billion worth of services, against USD 3 billion in exports. According to the World Bank, in the same year, the country’s trade deficit shrank to 3.6% of its GDP, from 7.4% one year earlier. According to figures from the national Export Development Board, in 2023, Sri Lanka's total exports amounted to USD 14.94 billion, comprising merchandise exports (USD 11.85 billion) and estimated service exports (USD 3.08 billion). This represented a marginal decline of 0.39% compared to the previous year's value of USD 14.99 billion. The estimated increase in service exports was approximately 63%. Merchandise exports for the period of January to December 2023 declined by 9.54%, amounting to USD 11,856.3 million compared to the same period in 2022.
Foreign Trade Indicators | 2019 | 2020 | 2021 | 2022 | 2023 |
---|---|---|---|---|---|
Imports of Goods (million USD) | 19,937 | 16,055 | 20,637 | 18,291 | 16,811 |
Exports of Goods (million USD) | 11,940 | 10,047 | 12,499 | 13,107 | 11,911 |
Imports of Services (million USD) | 6,619 | 3,821 | 2,952 | 2,782 | 3,333 |
Exports of Services (million USD) | 7,474 | 3,035 | 2,475 | 3,062 | 4,981 |
Imports of Goods and Services (Annual % Change) | -4 | -20 | 4 | -20 | 6 |
Exports of Goods and Services (Annual % Change) | 2 | -30 | 10 | 10 | 12 |
Trade Balance (million USD) | -7,997 | -6,008 | -8,139 | -5,185 | -4,900 |
Foreign Trade (in % of GDP) | 49 | 37 | 41 | 47 | 43 |
Imports of Goods and Services (in % of GDP) | 28 | 22 | 24 | 25 | 22 |
Exports of Goods and Services (in % of GDP) | 22 | 15 | 17 | 22 | 21 |
Source: WTO – World Trade Organisation ; World Bank - Latest available data.
Main Customers (% of Exports) |
2023 |
---|---|
United States | 23.2% |
United Kingdom | 7.1% |
India | 7.1% |
Italy | 5.7% |
Germany | 5.0% |
United Arab Emirates | 3.2% |
Netherlands | 2.9% |
France | 2.6% |
Canada | 2.5% |
China | 2.2% |
Australia | 1.9% |
Belgium | 1.9% |
Türkiye | 1.6% |
Japan | 1.6% |
Switzerland | 1.6% |
Mexico | 1.5% |
Israel | 1.5% |
Hong Kong SAR, China | 1.5% |
Bangladesh | 1.5% |
Singapore | 1.3% |
See More Countries | 51.9% |
Main Suppliers (% of Imports) |
2023 |
---|---|
India | 19.5% |
China | 18.9% |
United Arab Emirates | 9.5% |
Singapore | 5.3% |
Malaysia | 4.5% |
United States | 3.1% |
Russia | 2.4% |
Indonesia | 2.3% |
Oman | 2.2% |
Pakistan | 2.0% |
Saudi Arabia | 1.8% |
Germany | 1.6% |
Thailand | 1.6% |
New Zealand | 1.5% |
South Africa | 1.5% |
Italy | 1.5% |
South Korea | 1.3% |
United Kingdom | 1.3% |
France | 1.2% |
Hong Kong SAR, China | 1.2% |
See More Countries | 42.2% |
Source: Comtrade, Latest Available Data
Source: Comtrade, Latest Available Data
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3.1 bn USD of services exported in 2022 | |
---|---|
37.11% | |
Personal travelPersonal travel | 37.11% |
OtherOther | 40.82% |
35.83% | |
22.07% | |
3.00% | |
0.61% | |
0.60% | |
0.50% | |
0.30% |
1.0 bn USD of services imported in 2022 | |
---|---|
34.92% | |
25.57% | |
Personal travelPersonal travel | 25.57% |
OtherOther | 39.51% |
16.91% | |
10.12% | |
5.86% | |
3.82% | |
1.69% | |
1.11% |
Source: United Nations Statistics Division, Latest Available Data
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