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Sri Lanka Accelerates Free Trade Agreement with Singapore to Boost Economic Ties

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By: Staff Writer

February 02, Colombo (LNW): Sri Lanka is set to fast-track the long-pending Free Trade Agreement (FTA) with Singapore, ensuring consistency in trade policy, according to Deputy Finance Minister Harshana Suriyapperuma. Speaking at a recent Committee on Public Finance (COPF) meeting, he confirmed the government’s commitment to fully implementing the agreement, which had faced multiple delays since its signing in 2018.

The Sri Lanka-Singapore Free Trade Agreement (SLSFTA) was signed at the ministerial level on January 23, 2018, and came into effect on May 1, 2018. 

Covering a broad range of economic activities—including trade in goods and services, investments, intellectual property rights, telecommunications, e-commerce, trade facilitation, government procurement, and economic cooperation—the agreement aims to foster stronger trade relations between the two nations.

Initially, the FTA faced opposition and was temporarily suspended in October 2018 by former President Maithripala Sirisena due to concerns about inadequate consultation with key government agencies. 

However, the current administration has reaffirmed its dedication to activating the agreement, which includes a phased elimination of tariffs on 80% of tariff lines over a 15-year period.

To facilitate the agreement’s implementation, a Gazette Notification (No. 2377/39) was presented to Parliament on January 7, 2025, under the Ports and Airports Development Levy (PAL) Act. This amendment, effective from March 29, 2024, reduces PAL from 10% to 6% on several imported goods from Singapore.

The tax reduction applies to items such as certain types of cement, apples, infant foods (excluding milk-based products approved by health 

authorities), medicines, surgical instruments, and bathroom fittings. Additionally, import duties on goods like electrical equipment, polythene, and aluminum products were revised under the FTA, while items outside the agreement remain subject to previous tax rates.

A key aspect of the SLSFTA is its aim to establish a stable and predictable business environment for Singaporean investors while providing Sri Lanka with expanded trade and economic opportunities. The agreement mandates a gradual reduction of import duties and para-tariffs over five to six years.

In line with this, the Sri Lankan government has already lowered import duties on two categories of goods, aligning with the FTA’s tariff liberalization roadmap, impacting multiple taxes such as Customs Import Duty (CID), CESS tax, and PAL.

 Despite initial resistance, COPF members eventually endorsed the PAL reduction, with Chairman Harsha de Silva underscoring the significance of fostering a free trade relationship with Singapore. He emphasized that the agreement aligns with Sri Lanka’s broader economic objectives and long-term growth strategy.

The implementation of the FTA had been delayed due to various factors, including the 2018 constitutional crisis, which led to its suspension by then-President Sirisena over concerns about insufficient consultation with key financial and port authorities. 

However, officials reassured COPF that the revised order activating the agreement, which was approved by the Cabinet in 2018, now provides a well-defined framework for tariff reductions.

With its renewed focus on trade liberalization, Sri Lanka views the Singapore FTA as a crucial step toward fostering economic growth and strengthening international trade partnerships. The agreement marks a significant policy milestone, positioning Sri Lanka for enhanced global commerce and investment opportunities.

Sri Lanka’s Apparel Industry Poised for Growth amid Challenges and Reforms

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By: Staff Writer

February 02, Colombo (LNW): Sri Lanka’s apparel sector showcased remarkable resilience and adaptability in 2024, with export earnings reaching approximately USD 4.7 billion—reflecting a 5% year-on-year growth. When factoring in direct textile exports, total earnings exceeded USD 5 billion. This steady progress underscores the industry’s potential for sustained expansion, supported by strategic policies and government backing.

The government reaffirmed its commitment to ensuring the apparel industry remains competitive on a global scale. During the 42nd Annual General Meeting (AGM) of the Sri Lanka Apparel Exporters Association (SLAEA), Industry and Entrepreneurship Development Minister Sunil Handunneththi pledged increased support for innovation, technical assistance, and regulatory reforms to help local manufacturers strengthen their market position.

Market Performance and Diversification

United States: Exports rose by 5.23% to USD 1.9 billion, though still 19.4% below 2019 levels, indicating room for further recovery.

United Kingdom: A robust 7.65% growth brought exports close to pre-pandemic figures, fueled by demand for ethically and sustainably produced garments.

European Union: A modest 0.81% increase helped maintain the sector’s market presence.

Emerging Markets: Exports surged by 10.13%, reflecting successful market diversification and direct shipping initiatives.

Key Government Interventions

To enhance global competitiveness, the government has prioritized improvements in supply chain efficiency and policy frameworks. A major development was the reactivation of the Export Development Council (EDCM) after a four-year hiatus. One of its key decisions was the introduction of an automated scanning system at Bandaranaike International Airport (BIA) to replace outdated manual inspections, reducing export delays.

Minister Handunneththi emphasized the need to overcome global supply chain disruptions, particularly in sourcing raw materials. He highlighted the government’s accelerated efforts to develop the Eravur Fabric Park, which aims to strengthen local textile production, reduce dependence on imports, and improve cost efficiency. The Joint Apparel Association Forum (JAAF) has reiterated the importance of localizing fabric manufacturing to boost competitiveness and align with global sustainability and traceability standards.

Challenges and Future Outlook

Despite 2024’s growth, export earnings remain 10.3% below the 2019 peak of USD 5.3 billion, with the industry facing headwinds such as global inflation and reduced consumer spending. The government recognizes that strategic investments and policy reforms will be crucial to regaining lost momentum and achieving future targets, including surpassing USD 6 billion in export revenue.

Handunneththi reaffirmed the apparel industry’s reputation as a global leader in ethical manufacturing, recalling Sri Lanka’s pioneering role in promoting fair labor practices and eco-friendly garment production through the ‘Garments Without Guilt’ initiative. Moving forward, he emphasized the need for continuous innovation, improved production processes, and alignment with international best practices to secure long-term, sustainable growth.

With strategic reforms and strengthened public-private collaboration, Sri Lanka’s apparel sector is well-positioned to navigate global challenges and solidify its standing as a key economic pillar.

Justice Mohamed Lafar Tahir appointed Acting President of Court of Appeal

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By: Isuru Parakrama

February 02, Colombo (LNW): Justice Mohamed Lafar Tahir has been appointed as the Acting President of the Court of Appeal, following the decision of President Anura Kumara Dissanayake.

Justice Tahir, the most senior judge currently serving in the Court of Appeal, was formally sworn in to his new role today (02), at a ceremony held at the Presidential Secretariat.

The appointment follows the acceptance of pre-retirement leave by Justice Bandula Karunaratne, the former President of the Court of Appeal.

Justice Karunaratne, having taken his leave, will step down from his position, and his departure has led to the elevation of Justice Tahir to the acting role.

The President’s Media Division (PMD) confirmed that the appointment is in line with established protocols for judicial leadership transitions.

Sri Lanka takes first step towards national policy on early childhood education and development

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February 02, Colombo (LNW): Sri Lanka has officially launched the first phase in the development of a National Policy on Early Childhood Education and Development, marking a significant move towards improving the foundation of education for young children across the country.

The initiative was introduced at a special event held at the Ministry of Education, Higher Education, and Vocational Education, with the participation of Prime Minister Harini Amarasuriya and Deputy Minister of Women and Children’s Affairs, Dr. Namal Sudarshana.

Prime Minister Amarasuriya highlighted the critical need for a comprehensive national policy on early childhood development that would be applicable not only to the central government but also to provincial authorities.

She pointed out that the current lack of a unified policy framework for early childhood education had led to inconsistencies in the quality and accessibility of services provided to young children across the nation.

The discussions during the event focused on creating a cohesive policy that could bring together the various early childhood education institutions operating across Sri Lanka.

The Prime Minister emphasised that the new policy must be holistic, encompassing a wide range of elements, from teacher training and guidelines to salary structures and recruitment exams.

She also stressed the importance of ensuring that the policy is integrated with the ongoing education reforms that the government is planning to introduce.

In collaboration with the Ministry of Women and Children’s Affairs and the Ministry of Education, Higher Education, and Vocational Education, a dedicated committee will be formed.

This committee will be responsible for drafting the necessary policy documents and preparing an integrated policy statement, which will later be formalised within a legal framework.

Prime Minister Amarasuriya also underscored the importance of safeguarding the well-being of preschool children, particularly during after-school hours, evenings, and teacher holidays.

She emphasised that ensuring the safety and security of young learners must be a priority within the new policy.

The event was also attended by K.D.R. Olga, Secretary of the Ministry of Women and Children’s Affairs, Nalaka Kaluwawa, Secretary of the Ministry of Education, Higher Education, and Vocational Education, and a number of other senior officials, all of whom expressed their commitment to the successful development and implementation of the policy.

Over 1.5 mn kg of expired food aid wasted due to distribution delays

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February 02, Colombo (LNW): Over 1.5 million kilogrammes of food aid, including essential items such as rice, lentils, and dates, stored at the Veyangoda warehouse complex under the Food Commissioner’s Department, have expired and are no longer suitable for consumption, reports said.

The food, which had been intended for distribution to vulnerable communities across Sri Lanka, was rendered useless due to significant delays in its distribution.

The stock, which was received under the World Food Programme (WFP) in 2023, was meant to assist low-income families, schoolchildren, and other at-risk groups.

However, despite its timely arrival, authorities failed to ensure that the supplies reached their intended recipients, leading to the unfortunate wastage of the goods.

The Veyangoda District Granary, a large storage facility covering 28,000 square feet and comprising 16 warehouses, is a central hub for government food reserves.

Of these, 10 warehouses are dedicated to food storage, and three were used to house the now-expired stock of WFP aid.

The food, sourced from countries such as Kazakhstan and Australia, had been kept in storage with the intention of assisting those most in need.

A team of officials, including Deputy Minister Mohamed Munir, MP Ruwan Mapalagama, and law enforcement officers, visited the Veyangoda facility earlier today to assess the extent of the damage.

During the inspection, it was noted that the mismanagement and lack of timely action had directly contributed to the massive wastage of valuable food supplies.

This incident has raised serious concerns about the efficiency and accountability of food distribution systems in the country. Experts are calling for immediate reforms to ensure that aid reaches the people who need it most and that such resources are not wasted due to logistical or administrative failures.

Jayasuriya attributes Sri Lanka’s loss to weak batting performance against Australia

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February 02, Colombo (LNW): Sri Lanka’s head coach, Sanath Jayasuriya, has stated that the team’s disappointing loss to Australia in the first Test was primarily due to a lacklustre batting performance.

Addressing the media at a press conference in Galle following the defeat, the former Sri Lankan cricket legend emphasised that there was no justification for the poor showing and no excuses to be made for the result.

Jayasuriya was candid in his assessment of the match, acknowledging that the conditions were not overly challenging.

This wicket is not particularly difficult to play on. The players must learn how to cope with pressure and know when to bat with confidence,” he said. “Test cricket presents a range of situations, and it’s important to manage those situations effectively.

He further stressed that Sri Lanka boasts a strong batting line-up and that the team needs to take responsibility for its performance.

We should have done better, and it’s clear that we didn’t perform to our potential. The batsmen must learn how to convert starts into big centuries. If the wicket had been challenging, I would have acknowledged that, but that’s not the case here,” Jayasuriya explained.

Looking ahead to the upcoming Test, the head coach expressed hope for a strong recovery from the team. “I expect to see a much better performance in the next match,” he added.

In response to a query about potential changes to the team for the second Test, Jayasuriya confirmed that discussions would be held with the selectors to assess the possibility of adjustments.

Surge in chikungunya cases across SL attributed to monsoon season

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February 02, Colombo (LNW): Health officials have raised concerns over a notable increase in chikungunya cases across Sri Lanka, particularly in the wake of the monsoon season.

Dr. Deepal Perera, a paediatrician at the Lady Ridgeway Hospital for Children, explained that the surge in cases can be largely attributed to the rising number of mosquitoes during the wet season, which creates ideal breeding conditions for the Aedes mosquito responsible for transmitting the virus.

Chikungunya shares many symptoms with dengue fever, including high fever, joint pain, and rash, making it difficult for the public to distinguish between the two illnesses.

As the number of affected individuals rises, Dr. Perera has emphasised the importance of taking preventative measures to minimise exposure to mosquitoes, which thrive in stagnant water during the rainy months.

The Ministry of Health has urged the public to adopt proactive measures to eliminate mosquito breeding sites, such as ensuring containers are emptied of stagnant water, using mosquito repellents, and installing netting or screens in living spaces.

Public health campaigns have been rolled out to raise awareness about the disease and the steps individuals can take to protect themselves and their families.

Whilst chikungunya is generally not fatal, the symptoms can be severe, especially for young children and the elderly, and can cause long-term joint pain that may persist for months.

Cabinet forms committees to reassess Adani Group’s wind power project amid legal scrutiny

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February 02, Colombo (LNW): The Sri Lankan Cabinet has established two new committees to conduct a comprehensive review of the Adani Group’s proposed wind power project, amidst ongoing legal proceedings surrounding the initiative.

Legal counsel has been sought regarding the operation of these committees to ensure that all necessary procedures are followed during the review process.

The Ministry of Power has outlined that these committees will focus on evaluating several key aspects of the project, including the projected costs, legal compliance, and the environmental impact assessments associated with the wind power development.

The aim is to ensure that the project aligns with national interests and regulations, and to address any concerns raised during the legal proceedings.

The Adani Group is planning a significant investment of US$ 1 billion into the project, which includes the construction of a 484 MW wind power facility in the regions of Mannar and Pooneryn.

However, with the legal challenges currently in motion, the government has opted to reassess the project’s feasibility and potential long-term impact before proceeding further.

Deadline extended for public consultations on proposed amendments to Electricity Act

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February 02, Colombo (LNW): Director General of the Power Sector Reforms Secretariat Pubudu Niroshan Hedigallage has announced an extension for the submission of written consultations on the proposed amendments to the Electricity Act No. 36 of 2024.

The new deadline for stakeholders to provide their feedback is now set for February 14, 2025.

The government has called for input from various stakeholders, including industry experts, businesses, and the public, to ensure that the proposed amendments are comprehensive and consider all perspectives.

Interested parties can submit their views through the official Ministry of Power website at http://powermin.gov.lk/, or send their written submissions directly to the Ministry of Energy at its office located at 437, Galle Road, Colombo 00300. Alternatively, consultations can also be emailed to [email protected].

This extension offers additional time for all relevant parties to engage with the proposed changes, which are intended to improve and modernise the country’s electricity regulations.

Fuel price adjustments tied to global market trends: Minister

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February 02, Colombo (LNW): Trade and Commerce Minister Wasantha Samarasinghe has confirmed that recent adjustments to fuel prices in Sri Lanka are in line with the country’s established pricing formula, which reflects the volatile nature of global market fluctuations.

Speaking in Anuradhapura, the Minister reiterated that the government is committed to adhering to this pricing structure, which necessitates monthly adjustments to fuel costs based on international market conditions.

Minister Samarasinghe emphasised that fuel prices are not fixed but fluctuate in accordance with a transparent formula that aligns with global trends.

He acknowledged the challenges this creates for the public, stating, “Whether we are in favour of these changes or not, we must follow this system. The price revisions—whether they are increases or decreases—are determined by the global market, and we have no option but to adjust accordingly.

Beyond fuel price adjustments, the Minister also touched on other measures the government is taking to alleviate the economic pressures faced by the public.

One such initiative includes a 30 per cent reduction in electricity tariffs for factories, which the Minister argued would have a positive ripple effect across the economy, ultimately benefiting the wider population by lowering production costs.

As a government, our priority is to reduce the financial strain on the people,” Minister Samarasinghe added. “We are working diligently across various sectors to ensure that the country is heading in the right direction towards economic stability and growth. Strengthening institutions and safeguarding the well-being of citizens remain at the forefront of our efforts.