By: Staff Writer

April 29, Colombo (LNW): In a crucial diplomatic maneuver, Sri Lanka is reportedly preparing to host Chinese Commerce Minister Wang Wentao in June 2025, amid intensifying global trade tensions triggered by new U.S. tariffs.

Although the visit has not been officially confirmed, mounting signs point to a deepening economic partnership between Colombo and Beijing, driven by urgent economic imperatives and shifting geopolitical dynamics.

The potential visit comes at a pivotal time. Following U.S. President Donald Trump’s latest reciprocal tariff policy, Sri Lankan exports now face a looming 44% tariff—though implementation has been delayed by three months—and an additional 10% universal baseline tariff.

With approximately $1 billion, or 8% of its exports at risk, Sri Lanka finds itself under tremendous pressure to diversify its trade partners rapidly.

Government insiders hint that trade and export expansion will dominate discussions during Wang’s expected visit, alongside the long-stalled Free Trade Agreement (FTA) between the two nations.

Talks on the FTA, initially launched in 2014, ground to a halt in 2018 over disagreements on key terms. Sri Lanka had pushed for immediate tariff eliminations on 500 items and periodic reviews every 10 years, while China insisted on a more gradual liberalization and a 20-year review timeline. Despite these roadblocks, both countries recommitted to fast-tracking the FTA during President Anura Kumara Dissanayake’s state visit to Beijing in January 2025.

Analysts believe a finalized FTA with China could inject much-needed momentum into Sri Lanka’s struggling economy. Enhanced access to the vast Chinese market, increased Chinese investments, and stronger links to the Belt and Road Initiative (BRI) could help Sri Lanka stabilize after its devastating 2022 economic collapse and sovereign debt default.

Already, China has pledged significant investments, including a landmark $3.7 billion oil refinery project—Sri Lanka’s largest-ever foreign direct investment—under the BRI framework. However, this deepening economic reliance on China reignites old fears.

Sri Lanka’s prior experiences, such as the controversial 99-year lease of the Hambantota Port to China due to debt distress, serve as cautionary tales about the risks of falling into a “debt trap.”

Neighboring India, which sees Sri Lanka as firmly within its strategic orbit, is watching these developments with concern. India extended over $4 billion in assistance to Sri Lanka during its 2022 crisis and continues to invest heavily in its energy and infrastructure sectors to counterbalance China’s influence.

Colombo has repeatedly assured New Delhi that its soil will not be used against Indian interests—a delicate diplomatic tightrope as Sri Lanka tries to reap benefits from both Asian giants.

Meanwhile, the United States has expressed broader concerns over China’s BRI, warning of potential sovereignty issues for participating countries.

While Washington has refrained from commenting directly on a potential China-Sri Lanka FTA, it has consistently advocated for transparency and sustainable investment standards across the Indo-Pacific region.

Caught in the middle of this escalating geopolitical “cold war,” Sri Lanka must tread carefully. Past caution has seen Colombo turn away from certain investment opportunities to avoid upsetting either China or India.

Yet today, with economic survival on the line, the island nation appears increasingly ready to embrace all viable avenues for foreign inflows, even if that risks strategic discomfort.

In January, Sri Lanka expressed gratitude to China for initiatives aimed at boosting Sri Lankan exports, signaling Colombo’s willingness to deepen trade ties amid a hostile global trading environment.

As the world’s major powers continue to jostle for influence, Sri Lanka’s balancing act between China, India, and the United States will be key to its economic recovery—and to maintaining its sovereignty in a turbulent new era.

By: Staff Writer

April 28, Colombo (LNW): In a bold step towards easing urban congestion and boosting eco-friendly tourism, the Sri Lankan Cabinet has approved a feasibility study for a national water-based transport and tourism network. The move aims to unlock the country’s vast potential of rivers, canals, and coastal waterways, transforming them into lively corridors for passenger travel and leisure.

Announcing the decision, Cabinet Spokesman and Minister Dr. Nalinda Jayatissa revealed that the plan will evaluate the possibility of launching boat services connecting major cities while enhancing tourism along Sri Lanka’s scenic inland and coastal routes.

“The feasibility study will assess the economic, environmental, and logistical aspects of the project,” Dr. Jayatissa stated during the weekly Cabinet briefing. Based on the study’s outcome, the project is expected to move forward as a public-private partnership (PPP), attracting local and foreign investment into water transport and tourism infrastructure.

Proposed key coastal routes include Puttalam to Colombo Fort, Fort to Galle, and Galle to Matara—offering commuters an alternative to heavily congested roads while providing tourists with picturesque travel experiences. Inland water bodies such as Hamilton Ela, Bere Wewa, Diyawanna Oya, and Madu Ganga—famous for their ecological and scenic value—will also be developed as part of the initiative.

The proposal, submitted by Minister of Foreign Affairs, Foreign Employment, and Tourism Vijitha Herath, comes at a time when traffic congestion, particularly in the Western Province, has become a severe issue. Average vehicle speeds in urban areas often fall below 10 km/h during peak hours, causing significant loss of time and money for commuters, while also contributing heavily to environmental pollution.

Previous efforts to address traffic woes through road and rail improvements have yielded limited success. Experts argue that the current transport system cannot sustainably handle increasing congestion levels. Introducing a water transportation system is seen as an environmentally friendly, cost-effective, fuel-efficient, and safer alternative—already proven successful in parts of Asia, Africa, Europe, and the Americas.

Sri Lanka’s historical network of waterways further strengthens the case for this shift. The Portuguese initially built canals around Colombo for freight, linking areas like Hendala and Bolgoda Lake. The Dutch later expanded the canal system, with the famous Colombo-Puttalam waterway, a 102-mile stretch completed in 1900, serving as a major transport route. During the British era, waterways facilitated the movement of tea, coffee, rubber, and graphite across the island.

Efforts to revive inland water transport are not new. Under the Megapolis development project, plans were drawn to establish three major lines in the Western Province: Wellawatta–Battaramulla, Fort–Union Place, and Mattakkuliya–Hanwella, using rivers, canals, and marshes. Traffic demand modelling through STRADA identified optimal locations for jetties, with boats designed to travel at an average speed of 18 km/h.

Building on recent successes like the Sri Lanka Navy-operated boat service for Open University students and staff along the Kirulupone Canal, the new national plan promises to reimagine water transport in Sri Lanka, offering a practical, scenic, and sustainable alternative for both commuters and tourists alike.

By: Staff Writer

April 28, Colombo (LNW): Sri Lanka’s Inland Revenue Department (IRD) is poised to integrate operations with the Excise and Customs Departments as a crucial first step toward creating a single, unified tax authority. This move aims to maintain one centralised digital system, streamlining tax records and ensuring seamless transaction tracking across sectors.

President Anura Kumara Dissanayake has instructed officials from both the Excise and Customs Departments to collaborate closely with the IRD, with a particular focus on regulating the alcohol and tobacco industries. The integration prioritises strengthening public health, enforcing compliance, and enhancing overall governance.

The government has emphasised that more effective regulation of alcohol and other legal intoxicants is essential to promote economic growth. Authorities plan to boost state revenue through tighter control of these industries, ensuring lawful revenue generation and strict adherence to regulations.

A major component of this strategy includes robust public awareness campaigns aimed at curbing illegal alcohol distribution, the spread of hazardous drugs, and the misuse of psychoactive substances. These efforts are designed to protect public health and ensure national safety by targeting the risks associated with unregulated alcohol consumption.

According to a senior Finance Ministry official, the initiative also involves setting up a strong, strategic management and decision-making framework for integrated operations. Discussions have already begun on developing a comprehensive human resource and technological advancement plan to strengthen the operational capacity of the Excise Department.

Currently, Sri Lanka Customs is responsible for collecting import duties, while the Excise Department manages taxes on alcohol, tobacco, and similar products. The Inland Revenue Department oversees corporate and personal income taxes. Although all three agencies theoretically aim to fund government operations, they function largely in isolation, creating loopholes that enable tax evasion and inefficiencies.

The siloed structure of these departments means that critical information is not shared between them. For instance, the IRD may not know the exact quantity of alcohol imported or sold by companies, while Customs has no mechanism to verify if importers accurately report their sales for income tax purposes. Such fragmentation opens doors for tax evaders to exploit gaps in the system.

Recognising these vulnerabilities, the government is determined to merge these departments into a single authority. Officials estimate that a successful merger could boost tax revenue collection by at least 65 percent — a critical necessity given Sri Lanka’s alarming budget deficit, which currently stands at Rs. 2.2 trillion.

Without coordination, the current system facilitates manipulation, where smugglers bypass excise duties and alcohol distributors pay excise taxes but underreport corporate earnings. These loopholes result in substantial losses for the government and undermine fair taxation.

The integration of the IRD, Customs, and Excise operations is therefore seen as an urgent reform to seal revenue leaks, strengthen compliance, and build a more sustainable fiscal foundation for Sri Lanka’s future.

By: Staff Writer

April 28, Colombo (LNW): The Sri Lanka Tea Board (SLTB) anticipates completing the full implementation of Geographical Indication (GI) certification for Ceylon Tea by the end of 2025, according to SLTB Chairperson Rajpal Obeyesekere.

Speaking to a local leading weekend newspaper the Morning, Obeyesekere explained that the application for GI certification was submitted around September 2024, immediately following Sri Lanka’s presidential election.

Notably, while Obeyesekere’s appointment under the new NPP Government took effect on 4 October 2024, the initial groundwork for GI certification was laid by the previous SLTB administration under then President Ranil Wickremasighe government, industry sources confirmed. 

Following the submission, the European Commission (EC) requested additional clarifications, which were provided by the SLTB in March 2025. Obeyesekere noted that the Commission’s final report on Ceylon Tea’s GI certification is expected by September 2025.

“At present, the technical and legal experts are confident that the EC will deliver the report within six months of our submission in March. We are preparing parallelly by completing the necessary local processes so that we can move to full implementation as soon as we receive the green light,” Obeyesekere said.

 He revealed that about seven local tasks are currently underway, in collaboration with French partners, to streamline the GI certification process. These steps, expected to conclude by October 2025, will place Sri Lanka in a strong position to immediately roll out the GI system once European approval is secured.

However, Obeyesekere also highlighted a potential challenge: after an application is accepted, there is a window for third-party objections. If objections arise, Sri Lanka would need to take legal measures to defend its claim to the Ceylon Tea GI.

The push for GI certification dates back to December 2021, when the SLTB, under then-Plantation Industries Minister Dr. Ramesh Pathirana, entered into a €1 million tripartite agreement with the French Development Agency (AFD) and the French Agricultural Research Centre for International Development (CIRAD). The grant aimed to develop a GI framework and certification system for Ceylon Tea over a four-year period.

Geographical Indication certification is critical for securing the global reputation and authenticity of Ceylon Tea by linking it to its unique Sri Lankan origin. It provides strong intellectual property protection while boosting the product’s value in both domestic and international markets.

Despite the progress made by the previous regime, the NPP government now faces significant tasks to complete the GI process.

Strengthening Sri Lanka’s domestic GI system remains a priority, alongside international outreach and stakeholder engagement. This involves officially registering Ceylon Tea as a GI within Sri Lanka—similar to the model used for Ceylon Cinnamon—and ensuring strict adherence to defined quality standards.

The National Intellectual Property Office (NIPO) must establish a local GI registry for Ceylon Tea and define the specific traits and production methods that qualify for the label. Traceability systems must also be introduced to guarantee that only compliant tea is marketed as “Ceylon Tea.”

Internationally, Sri Lanka will need to negotiate GI recognition through trade agreements and mobilize support from the tea industry, government bodies, and consumers to promote and protect the GI status.

By completing these steps, Sri Lanka aims to preserve the global prestige of Ceylon Tea, ensuring that only authentic, high-quality tea carries the iconic name.