Sri lanka Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in sri lanka, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Trade Agreements
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Sri Lanka has signed Free Trade Agreements (FTAs) with India, Pakistan, and Singapore, and is currently negotiating an FTA with Thailand. The FTA with Thailand is expected to be completed by the first quarter of 2024.  Sri Lanka has publicly stated its goal to join the Regional Comprehensive Economic Partnership (RCEP) and is at present engaged in the required preliminary work. The government intends to strengthen its trade ties particularly with the Asia Pacific Region. At present, Sri Lanka is a party to the Agreement on South Asian Free Trade Area (SAFTA) and the Agreement on Asian Free Trade Area (AFTA). There appear to be renewed efforts from the Sri Lankan government to recommence negotiations with China and expand the existing FTA with India.

The FTAs with India and Pakistan cover only trade in goods.  The agreements provide for duty-free entry as well as duty preferences for manufactured and agricultural goods.  Domestic value addition of 35 percent is required to qualify for concessions granted under the agreements.  

The Singapore-Sri Lanka FTA was signed in May 2018 covering, goods, services, trade facilitation, government procurement, telecommunications, e-commerce, and dispute settlement.  The bilateral FTA is not in full operation due to subsequent disagreement over implementation terms regarding market access, with the two countries currently in talks to negotiate the possibility of full implementation in the future.

Some Sri Lankan exports to the United States qualify for duty free privileges under the U.S. Generalized System of Preferences (GSP) program, which expired in December 2020 pending its renewal by the U.S. Congress. The GSP offers preferential duty-free treatment for up to 5,000 products (apparel products are excluded) from designated beneficiary countries.  The United States-Sri Lanka bilateral Trade and Investment Framework Agreement (TIFA), signed in 2002, provides a framework for the two governments to discuss and resolve trade and investment issues at an early stage.   The most recent TIFA discussions occurred in September 2023.

Sri Lankan exports also qualify for the European Union’s (EU) GSP+ program which was renewed in September 2023The trade preferences under GSP+ consists of the full removal of duties on 66 percent of tariff lines, covering a wide array of products including textiles and fisheries.  The GSP+ scheme is conditional on Sri Lanka advancing human and labor rights and working towards sustainable development.

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