Import Restrictions

On February 1, 2025, Sri Lanka lifted its five-year ban on vehicle imports. The government intends for vehicle imports to generate tax revenue and support economic recovery following the recent economic crisis.

Sri Lanka enacted an anti-dumping and countervailing duties law and a safeguard measures law in 2018 to protect domestic industries from injurious dumping and subsidization, and to allow safeguards when import surges cause or threaten injury in the domestic market. These laws will not take effect until the government publishes implementing regulations.

The Ministry of Defense controls import of firearms and ammunition for the armed forces, police, and civil security. Certain military-related or dual-use items are prohibited or controlled, including radars, night-vision devices, beta lights, armored vehicles, explosion-detection equipment, digital-jamming equipment, infrared illuminators, GPS equipment, and laser designators. Imports of laser/radar range finders and thermal imaging devices require Ministry of Defense approval. Remote-controlled toys are also subject to license control for public security reasons. Imports of toxic and hazardous chemicals and pesticides are restricted. Used and reconditioned air conditioners and refrigerators require licenses for environmental protection.

Import Licensing 

Sri Lanka requires import licenses for more than 400 items at the six-digit level of the Harmonized Tariff Schedule, mostly for health, environmental, and national security reasons. Importers must pay a fee to obtain a license. Licenses for meat products may be required depending on the health or disease status of livestock in the country of origin.
Approval of licenses is at the discretion of regulators;  no uniform procedures exist, and requirements vary. Agencies often lack the capacity to make scientific determinations and instead follow a zero-risk policy in place of science-based standards. Imports of telecommunication equipment require approval from the Telecommunications Regulatory Authority and a license from the Controller of Imports. Some items subject to Import Control Licenses (ICLs) were temporarily banned under the April 2020 restrictions, which remained in effect through 2022.

Tea 

The Sri Lanka Tea Board regulates tea imports. Imports require a license, and only bulk tea may be imported. Only registered tea exporters may import tea for value addition and re-export, and only certain varieties are permitted. Re-exported packages must state: “Ceylon Tea blended with other origin teas.”

Customs Barriers and Trade Facilitation  

Duties are calculated using the actual transaction value of goods, as evidenced by the commercial invoice or other contract of sale. If the value cannot be established by this method, Sri Lanka Customs applies alternative valuation methods in line with Article 7 of the General Agreement on Tariffs and Trade (GATT). When Customs officials reject the declared value and determine value under GATT procedures, the importer has the right to appeal to the Director General of Customs. The Customs Ordinance allows importers to clear goods provisionally from Customs custody while a final valuation is pending, unless fraud is suspected. U.S. companies have expressed concern that the valuation system is inconsistently applied and vulnerable to misuse.

Section 153(2)(b) of the Customs Ordinance authorizes Customs officers to receive 50 percent of monetary penalties imposed for Customs infractions. Revenue from the sale of forfeited goods is credited to the Customs Officers Reward Fund. Several U.S. companies have reported that this system creates incentives for Customs officers to take unwarranted enforcement actions.

The government has taken steps to improve trade facilitation in line with the World Trade Organization (WTO) Trade Facilitation Agreement. A National Trade Facilitation Committee (NTFC) was established in 2016, and Sri Lanka launched its online trade information portal in July 2018. As of April 2022, all required trade-related information is available on the portal (https://srilankatradeportal.gov.lk/). 

The Sri Lanka Trade Information Portal (https://srilankatradeportal.gov.lk/) is a one-stop resource for information related to imports and exports. Operated by the Sri Lankan Department of Commerce, the portal provides traders with access to regulatory and procedural requirements for export, import, and transit. This initiative also reflects the government’s commitment to its obligations under Article 1 of the World Trade Organization (WTO)’s Trade Facilitation Agreement.

Other Market Access Barriers 

Price Controls 

The Consumer Affairs Authority (CAA) sets maximum retail prices (MRPs) for essential consumer goods, including lentils, rice, chickpeas, dried chili peppers, canned fish, sugar, imported onions, and imported potatoes. Food importers have lobbied for the removal of MRPs. 

Pharmaceuticals 

A lack of robust quality assurance and the current price control regime make it difficult for global pharmaceutical companies to operate in Sri Lanka. In 2022, the National Medicines Regulatory Authority (NMRA), under the Ministry of Health, revised MRPs for 60 essential drugs. The government also imposed price controls on intra-ocular lenses in February 2017 and on stents in August 2017; prices were last revised in 2021.

Sri Lanka imports about 85 percent of its pharmaceuticals. The government has taken only limited steps to adjust MRPs to reflect rupee depreciation. Industry stakeholders have urged the government to adopt a depreciation-linked pricing mechanism for pharmaceuticals and medical devices. Some global pharmaceutical companies have indicated they may withdraw products from the market due to the absence of an effective pricing system. The government also promotes local pharmaceutical production through buy-back guarantees.

International Film Import Quota 

The National Film Corporation (NFC) imposes quotas on foreign film imports, restricting growth of the entertainment sector. Delays in approvals often disrupt timely releases as importers may wait several days for clearance. Current regulations limit English-language film imports to 65 titles annually, with a maximum of 13 per importer. The process of importing foreign films remains opaque. Quotas do not apply to local films.

In addition, Gazette Notification 2344/40 from the Ministry of Mass Media established discriminatory license fees, charging higher rates for international films than for local films, creating an unfair market advantage for domestic productions.
In 2017, the government increased the tax on dubbed foreign films and television series from LKR 90,000 (approximately $250) to LKR 150,000 (about $420) per 30-minute episode. Foreign television shows in their original language are taxed at LKR 100,000 (about $280) per 30-minute episode. Foreign films in their original form are taxed at LKR 200,000 (about $560) per film, with higher rates applied to repeat telecasts. Foreign commercials are taxed at LKR 500,000 (about $1,400) in the first six months and LKR 1,000,000 (about $2,800) thereafter. All foreign films and television programs require government approval before broadcasting.

Technical Barriers to Trade

Soft Drinks

Sri Lanka issued the Food (Color Coding for Sugar Levels) Regulations in 2016, requiring labeling for carbonated beverages, ready-to-serve drinks other than milk-based products, and fruit juices. It was notified to the World Trade Organization (WTO) Committee on Sanitary and Phytosanitary Measures in June 2016 as G/SPS/N/LKA/39. In November 2017, the government imposed an excise duty of LKR 12 per liter or LKR 0.5 per gram of sugar (approximately $2.85 per kilogram of sugar) contained in beverages, whichever is higher. The measures were introduced with limited input from the beverage industry and with little time for companies to respond and implement changes.

Since the excise duty was implemented in 2017, Sri Lanka’s carbonated soft drink industry has lost about 35 percent of its total sales volume. The industry’s tax burden has risen to nearly 50 percent of gross revenue. The government has also considered additional taxes on the beverage and soft drink sector. These measures affect the sales of both U.S. companies and domestic producers.

Recently, the Ministry of Health introduced a new regulation, Food (Color Coding for Sugar Levels - Liquid) Regulations (2022) and Amendment to regulate labeling of sugar content of liquids effective January 1, 2026, replacing the existing regulation of Food (Color Coding for Sugar Levels) Regulations (2016). For pre-packaged imported food products, a supplementary label may be affixed on the container or the package. The new regulation has modified the sugar content values for each code and added logos with color coding in red, amber, and green. Sugar content must display within the logo in Sinhala, Tamil, and English languages in bold white lettering.
 

TABLE: Sri Lanka, Sugar Contents and Color Codes for Liquid 
 

Source: Food (Color Coding for Sugar Levels-Liquid) Regulation (2022).
 

Sanitary and Phytosanitary Measures

Biotechnology

Sri Lanka requires approval from the Chief Food Authority for the import or sale of products derived from genetic engineering (GE) for human consumption. However, Sri Lanka does not have a functioning approval mechanism for GE products, which has effectively resulted in a ban on the import of GE seeds and other agricultural products. All agricultural imports must be certified as “non-GE.”  Quarantine procedures prohibit the import of genetically modified organisms (GMOs) and living modified organisms (LMOs).

Food products for human consumption that contain GE ingredients require prior authorization and labeling. Imports with GE content below 0.9 percent are permitted if the presence is considered technically unavoidable. The United States government continues to engage Sri Lanka on establishing a biotechnology regulatory framework consistent with international standards.

Poultry Products

Sri Lanka permits imports of poultry products only from countries free of Highly Pathogenic Avian Influenza (HPAI), or after six months have passed since notification to the World Organization for Animal Health (OIE) that a region is free of avian influenza. This exceeds OIE guidance, which allows trade to resume three months after the last detection.
Beginning in 2018, Sri Lanka relaxed its rules for U.S. poultry, permitting imports from areas with a three-month disease-free status, subject to a consignment-specific risk assessment. Poultry imports remain subject to licensing. Chicken meat is imported only for further processing and reexporting, while duck and turkey are allowed since there is no significant domestic industry. Prior approval from the Department of Animal Production and Health is required, along with other import authorizations. Currently, HPAI is the major barrier when importing frozen turkey and duck meat to Sri Lanka.

Meat Products 

Sri Lankan authorities require lengthy microbiological testing of meat shipments and sometimes reject imports based on methods not specified in regulations or import permits. Only the Medical Research Institute (MRI) in Colombo and Veterinary Research Institute (VRI) in Peradeniya are recognized for such testing. In March 2020, MRI achieved accreditation under ISO/IEC 17025:2005, the international standard for testing and calibration laboratories.

Shipments that test positive must be re-exported. Extended testing delays often expose importers to insurance risk, as policies may expire before results are issued. All meat product imports require licenses. Beef is permitted for both retail and restaurants; pork is allowed only for hotels and restaurants.

Government Procurement

Procurement of most goods and services occurs through public tenders. Some tenders are limited to registered suppliers, while others are awarded outside normal competitive procedures. Transparency and accountability in the procurement process are recurring concerns. Tender specifications are often written to favor specific companies, either domestic or foreign, and even when U.S. firms win tenders, contracts can be canceled on technicalities, sometimes at the urging of competitors. The government also continues to accept unsolicited proposals without competitive bidding.
Sri Lanka is not a signatory to the WTO Agreement on Government Procurement (GPA) but has been an observer since April 2003.

Services Barriers

Distribution and Express Shipments

Sri Lanka does not provide de minimis treatment for inbound shipments. Airport authorities do not grant preferential handling to express cargo carriers; shipments undergo routine security and customs procedures, causing delays in clearance.

Financial Services 

Sri Lanka’s financial services sector is dominated by banks, which are regulated under the Banking Act and the Monetary Law Act. The Central Bank of Sri Lanka (CBSL) licenses both commercial banks and specialized banks (e.g., savings and development banks).

A 2.5% stamp duty applies to credit card transactions in foreign currency, though local currency transactions are exempt. This places U.S. e-commerce firms at a disadvantage when pricing products in dollars.

Insurance services

Only companies incorporated in Sri Lanka may be licensed to provide insurance services. Foreign insurers offering health insurance must sell through locally registered brokers and are limited to products not already available from domestic companies. The government requires all general insurers to cede 20 percent of their reinsurance to a state-owned reinsurance fund.