Sri Lanka’s export sector is navigating a complex mix of global and domestic pressures, with rising geopolitical tensions linked to the Gulf War threatening to compound longstanding weaknesses in the country’s trade ecosystem.
Industry data compiled by the Ceylon Chamber of Commerce suggests that exporters are increasingly concerned about the country’s ability to compete with regional rivals in attracting investment and sustaining export growth.
The chamber’s Export Barometer Survey 2026 reveals that a majority of exporters believe Sri Lanka’s investment environment is slightly or significantly worse than that of competing economies.
Conducted between November 2025 and January 2026, the survey included responses from 90 export-oriented firms comprising both small and medium enterprises and larger corporations—and was supported by key interviews with industry stakeholders.
Respondents pointed to several structural challenges affecting export competitiveness, including high labour costs, rising energy prices, regulatory hurdles and inefficiencies in logistics and infrastructure.
These domestic issues are now intersecting with global risks.With tensions in the Gulf region threatening shipping routes and increasing fuel costs, exporters fear further strain on supply chains and freight costs factors that could weaken Sri Lanka’s price competitiveness in international markets.
Yet the survey suggests that many companies are adopting survival strategies rather than retreating from global markets.
Market diversification appears to be a key tactic. Around 55% of exporters reported identifying new markets for their products and services, signalling a strategic shift aimed at reducing dependence on traditional destinations.
Product innovation is another approach. Approximately 28% of respondents said they were exporting new products to existing markets, while another 27% reported launching new products in entirely new markets. Meanwhile, about 28% are selling existing products in new international destinations.
A smaller share about 15% are also exploring domestic opportunities by introducing new products locally.
The findings highlight a broader trend within Sri Lanka’s export community: businesses are attempting to adapt through innovation and diversification even while operating within a challenging policy environment.
Exporters say policy reforms will be critical to sustaining this momentum.
Among the most frequently proposed measures is the establishment of a National Single Window system to simplify export and import procedures. Such a digital platform could streamline regulatory approvals by integrating customs authorities, ports, tax agencies and other government institutions.
Businesses also stress the importance of digital trade tools including e-payments, digital identity verification systems and supply chain traceability infrastructure to help exporters comply with international regulations and maintain access to global markets.
Additionally, companies are calling for expanded training programs, concessional financing and tax incentives to support innovation, particularly among small and medium-sized exporters.
Greater collaboration among government institutions, industry chambers, development agencies and startups is also seen as vital to improving market research and fostering new business partnerships.
As global trade uncertainty intensifies, the survey underscores a central challenge: Sri Lanka’s exporters may be ready to innovate and diversify but their success will depend heavily on whether policy reforms keep pace with a rapidly changing global trade environment.