Sri Lanka’s cinema industry, battered by years of neglect and the COVID-19 pandemic, is calling for sweeping reforms and immediate policy changes to ensure its survival.
The National Film Corporation (NFC), once established to nurture the industry, is under mounting pressure from theatre owners, distributors, and producers to step back from operational roles and instead function solely as a regulator.
Industry leaders argue that unless the NFC aligns its outdated regulations with modern cinema realities, Sri Lanka risks losing billions in investments and seeing audiences permanently migrate to streaming platforms.
Stakeholders, including Liberty Cinemas, EAP Films, Cinema Entertainment Ltd., and other distributors, have proposed a fully liberalised private-sector-driven model.
They allege that bureaucratic inefficiencies at the NFC have stifled growth for decades, citing its failure to support the digitalisation of cinema since 2000. Funds allocated by the Treasury for production facilities, film archives, and a national training school have reportedly gone underutilised, while the NFC itself runs at heavy losses.
The most contentious issue remains the outdated film quota system. Under current rules, set more than 25 years ago, annual imports are capped at 65 English films, 25 Hindi, 70 Tamil, and 25 in other languages.
While originally designed to protect Sinhala cinema, exhibitors say the restrictions no longer reflect audience demand. At present, over 15 Hindi and Tamil titles and nearly two dozen Hollywood releases, including IMAX screenings, are awaiting approval but cannot be imported due to quota limits.
“The quota system is crippling the Rs. 10 billion industry,” warned Film Exhibitors Association President Anuradha B. Rekawa. “It prevents audiences from accessing global content and undermines heavy private investment in theatres. Without reform, the industry cannot sustain its growth momentum.”
The figures underscore this potential. Box office revenue, which averaged just Rs. 7 million in 2024, soared to over Rs. 1.5 billion in the first half of 2025 alone, driven largely by successful Sinhala releases.
Industry stakeholders expect revenues to exceed Rs. 3.5 billion by year’s end. Six Sinhala films this year have already grossed more than Rs. 200 million each, with occupancy rates above 75 percent—higher than several Hollywood blockbusters.
Modern venues such as the IMAX theatre at Havelock City and the 4K-equipped JP Cineplex in Kandy have raised audience expectations. Multiplex projects are now underway in Kandy, Galle, Moratuwa, and Mount Lavinia, with investors seeking government support in land allocation and tax incentives.
Distributors argue that by modernising policies, Sri Lanka could both strengthen domestic film production and attract international filmmakers.
“The Government must act urgently to reform the NFC Act,” said Liberty Cinemas Chairman Imthiaz Cader. “We are the only country in Asia with such restrictions. Removing quotas and supporting innovation will ensure the future of Sri Lankan cinema.”
Industry leaders say they are ready to collaborate with authorities on a new framework that supports local creativity while opening doors to global markets. With audiences returning to theatres and major investments flowing in, stakeholders insist that reform now will determine whether Sri Lanka’s film industry revives—or risks fading into obscurity.
