Sri Lanka’s exporters are bracing for a potential economic setback as tensions in the Gulf region threaten to disrupt one of the island nation’s most lucrative export markets. Industry leaders say the ongoing conflict could cost the country nearly $650 million in lost export revenue in 2026, highlighting the vulnerability of Sri Lanka’s trade sector to geopolitical shocks.

In response to growing concerns, the Sri Lanka Export Development Board recently convened a strategic meeting with export associations, logistics providers, and government agencies to examine the risks facing businesses shipping goods to Middle Eastern markets.

For decades, Gulf countries have served as vital destinations for Sri Lankan products, particularly tea, spices, food items, and agricultural produce. However, exporters warn that instability in the region is beginning to disrupt commercial activity, from maritime transport to buyer demand.

At the meeting, industry representatives stressed that uncertainty in shipping routes and rising freight charges are already affecting trade flows. Representatives from organisations such as the Sri Lanka Food Processors Association, the Spices and Allied Products Producers and Traders Association, and the Lanka Fruit & Vegetable Producers Processors and Exporters Association raised concerns about delivery delays and increased operational costs.

Logistics professionals also warned that the conflict could strain supply chains if maritime routes through the region become unsafe or heavily restricted. Stakeholders including the Sri Lanka Freight Forwarders Association and the Ceylon Association of Shipping Agents discussed contingency strategies to maintain cargo movement despite the volatile environment.

Government institutions such as the Sri Lanka Tea Board and the Department of Fisheries and Aquatic Resources also participated, acknowledging that any downturn in exports would directly affect thousands of producers and workers across the country.

Economists warn that a prolonged conflict could significantly weaken Sri Lanka’s foreign exchange earnings. The country relies heavily on export revenue to stabilize its balance of payments, particularly after the severe economic crisis experienced in recent years.

If shipments to Middle Eastern markets decline by even 15–20 percent, analysts estimate Sri Lanka could lose roughly $650 million in export income in 2026. Such losses could reduce government revenue, increase trade deficits, and slow overall economic recovery.

However, experts say the crisis also exposes an opportunity for reform. Exporters are urging the government to accelerate trade diversification by targeting new markets in Africa, South Asia, and East Asia. Strengthening value-added exports, investing in digital trade platforms, and improving logistics efficiency are also seen as critical steps.

The outcomes of the recent consultation will be submitted to the Export Development Council of Ministers for policy consideration. Officials are expected to explore financial assistance, risk-mitigation tools, and export promotion initiatives to help businesses navigate the crisis.

For Sri Lanka’s exporters, the message is clear: survival in an increasingly unpredictable global market will depend not only on resilience, but on rapid adaptation to geopolitical realities shaping international trade.

The Committee on Public Finance (COPF) has approved the proposal regarding the salaries and service conditions of officers and staff of the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) in accordance with the Anti-Corruption Act No. 03 of 2023.

The COPF met in Parliament recently under the chairmanship of MP Dr. Harsha de Silva, where the approval was granted after reviewing the proposal.

Committee members Deputy Ministers Nishantha Jayaweera and Chathuranga Abeysinghe, and MPs Ravi Karunanayake, Wijesiri Basnayake and Nimal Palihena also attended the meeting.

During the discussion, Director General of the Bribery Commission Ranga Dissanayake said CIABOC is functioning as a new institution established under the Anti-Corruption Act passed in 2023.

He noted that the law provides for the Commission to appoint the required officers and employees, while their remuneration and service conditions must receive parliamentary approval with the concurrence of the Finance Minister.

Dissanayake also expressed concern over the two-year delay in implementing these measures following the passage of the Act.

The Finance Ministry’s Management Services Department has approved 971 staff positions required for the Commission along with their salary structures and special allowances.

The COPF also noted that the salary scale proposed for legal officers attached to the Commission is lower than that of legal officers in the Attorney General’s Department. However, the Committee approved the proposal to avoid further delays in recruitment, while emphasizing that appropriate salary scales should be established in the future to strengthen the institution.

The Committee further observed that a separate proposal regarding the salary scales of the Commissioners and the Director General, including the Chairman, will be presented later. It is expected that their salaries will be aligned with those of Court of Appeal judges, as previously recommended by the COPF.

The Committee also noted that higher salaries compared to the general public sector are justified given the sensitive nature of anti-corruption work, the restrictions on earning additional income, and the potential for conflicts of interest.

Meanwhile, the CIABOC Director General pointed out that having the Bribery Commission based only in Colombo creates operational challenges, particularly when conducting investigations and bringing witnesses from other parts of the country.

He said there are plans to expand the Commission’s presence by establishing district-level offices, with the aim of initially setting up at least nine provincial offices across the country.

The government is considering easing restrictions imposed on the production of by-products from rice, Agriculture Minister K.D. Lal Kantha said.

The minister made the remarks during a meeting of the Mahaweli Water Management Committee held on Friday (13).

Lal Kantha noted that Sri Lanka currently produces only about 50% of its maize requirement locally, with the remaining demand being met through imports.

He said that due to the limited land available for maize cultivation, the country should instead focus on increasing rice production.

The minister further stated that the government does not intend to expand the extent of paddy cultivation land, but urged farmers to follow the cultivation guidelines issued by the Department of Agriculture to improve productivity.

He also stressed the importance of improving post-harvest management, including proper paddy drying and storage, to prevent large quantities from entering the market at the same time.

Ensuring fair income for farmers and strengthening food security remain key priorities, Lal Kantha said, adding that farmers would be discouraged from cultivation if they are not guaranteed a reasonable profit.

The minister also acknowledged that the Paddy Marketing Board’s intervention has been limited due to constraints related to storage facilities and staffing.

He thanked farmers and state officials for resuming cultivation following crop damage caused by Cyclone Ditwah.

Lal Kantha also urged farmers to increase the cultivation of Keeri Samba, noting that Sri Lanka still imports the rice variety to meet local demand.

Parents and schools should pay closer attention to children participating in sports activities amid the prevailing hot weather, pediatric respiratory specialist Dr. Channa de Silva said.

Dr. Channa de Silva of the Lady Ridgeway Hospital for Children warned that precautions are particularly important during school sports events, as high temperatures could pose health risks to students.

He made the remarks at a media briefing held at the Ministry of Health auditorium on Friday (13) to raise awareness on minimizing health risks associated with hot weather.

Dr. De Silva said schools should consider reducing sports activities during periods of intense heat and ensure that students are given regular breaks.

“Particularly during school sports activities, events held between **10 a.m. and 1 p.m., when the heat is most intense, should be minimized as much as possible,” he said.

He stressed that children should be given frequent rest intervals, moved to shaded or cool areas, and encouraged to drink water or beverages containing salts.

“Children like to play continuously, but that should not be allowed under these conditions. Regular breaks are essential,” he said.

The doctor warned that prolonged exposure to high temperatures without proper rest and hydration could lead to complications including fatigue, dizziness and muscle cramps.

“If a child shows symptoms such as weakness, fatigue, dizziness or confusion, they should be immediately moved away from the heat to a cool place and given water. If the condition persists, they should be taken to the nearest government hospital as soon as possible,” he added.

He also cautioned that severe heat exposure could lead to heatstroke, which can become life-threatening if not treated promptly.

Prime Minister Dr. Harini Amarasuriya says promoting the local industrial sector is one of the key priorities of the Government.

She made these remarks while attending the official opening ceremony of the INCO 2026 Industrial Exhibition on Friday (13) at the BMICH Exhibition Centre, according to the Prime Minister’s Media Division.

The INCO 2026 Industrial Exhibition, organised by the Institution of Incorporated Engineers, Sri Lanka (IIESL), is being held for the 20th consecutive year and will run from March 13 to 15.

Addressing the event, the Prime Minister said the engineering sector plays a vital role in addressing practical challenges faced by a country while improving efficiency and safety.

She also noted that exhibitions of this nature encourage students to engage in innovation and technological development.

Dr. Amarasuriya said the Government has implemented several measures to accelerate industrial development, including the establishment of the National Industry Information System (NIIS), a centralized digital platform designed to collect and manage data related to the country’s economic and industrial activities.

She added that steps are also being taken to provide financial support to industrialists through revolving funds.

The Prime Minister further noted that this year’s exhibition has attracted international participation, creating opportunities for local entrepreneurs to explore new markets and gain exposure to global technologies.

“With the participation of engineers, students and entrepreneurs, this exhibition marks an important step toward the country’s industrial future,” she said.

The event was attended by Chairman of the Export Development Board Mangala Wijesinghe, Chairman of the National Paper Company Limited Upali Rathnayake, President of IIESL Engineer Ananda Gunawardena, as well as local and foreign investors, entrepreneurs and industrialists.

The United States has announced a reward of up to $10 million for information about senior Iranian military and intelligence officials, including the country’s new Supreme Leader Ayatollah Mojtaba Khamenei.

According to the U.S. State Department’s reward programme website, the offer targets 10 officials linked to Iran’s Islamic Revolutionary Guard Corps (IRGC). The force, established after Iran’s 1979 Islamic Revolution, is tasked with protecting the country’s clerical leadership and is loyal to the supreme leader.

Mojtaba Khamenei recently succeeded his father, Ayatollah Ali Khamenei, as Iran’s supreme leader after the elder leader was killed along with several senior officials in joint U.S. and Israeli strikes launched on February 28.

The younger Khamenei is believed to have been injured during the strikes and has not appeared in public since, although he issued his first statement on Thursday.

In addition to Khamenei, the U.S. is seeking information on several other senior Iranian officials, including security chief Ali Larijani, Intelligence Minister Esmail Khatib, Interior Minister Eskandar Momeni, and two officials working in the Supreme Leader’s office.

However, videos verified by Reuters on Friday showed Larijani attending a rally in Tehran alongside President Masoud Pezeshkian and Foreign Minister Abbas Araqchi, despite earlier remarks by U.S. Defense Secretary Pete Hegsethsuggesting Iran’s leadership was hiding underground.

The reward programme also lists four additional officials, including the IRGC commander and the secretary of the defence council, though their names and photographs were not disclosed.

“These individuals command and direct various elements of the IRGC, which plans, organises and executes terrorism around the world,” the State Department said.

The United States has previously designated the IRGC as a foreign terrorist organisation, accusing it of involvement in attacks that have killed U.S. citizens and alleging that Iran has plotted assassinations against President Donald Trump and other American officials in retaliation for the 2020 killing of Iranian commander Qassem Soleimani.

Iran has repeatedly denied such allegations, stating that the accusations are politically motivated and used by Washington to justify sanctions and pressure campaigns.

Showers or thundershowers will occur at several places in Western, Sabaragamuwa, Central, North-western and Uva provinces and in Galle, Matara, Mannar and Anuradhapura districts after 2.00 pm. Fairly heavy showers above 50 mm can be expected at some places in Sabaragamuwa and Central provinces and in the Galle and Matara districts.

Mainly fair weather will prevail elsewhere over the island.

Misty conditions can be expected at some places in Central, Sabaragamuwa and Uva provinces and in Galle and Matara districts during the early hours of the morning.

The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.

Sri Lanka is seeking to strengthen its financial crime defences after a new national review highlighted emerging threats from terrorist financing, digital financial channels and global proliferation risks.

The latest National Risk Assessment, completed by the Financial Intelligence Unit, examined the country’s vulnerabilities to money laundering, terrorist financing and proliferation financing.

The assessment, which involved 86 institutions and nearly 200 experts, represents the most extensive national review yet of Sri Lanka’s financial crime landscape.

Officials say the initiative was conducted under the guidance of the National Coordinating Committee on Anti‑Money Laundering and Countering the Financing of Terrorism and analysed risks across 15 core sectors.

For the first time, the review included a national assessment of proliferation financing the funding of activities linked to weapons proliferation reflecting growing international concern over such financial networks.

The report concluded that Sri Lanka’s proliferation financing risk currently stands at a medium level, shaped by a challenging global environment and domestic regulatory vulnerabilities.

Terrorist financing risks were assessed as medium-high, marking an increase from the previous medium rating.

Investigators attribute this shift to evolving extremist and separatist networks, as well as the potential influence of diaspora funding, online radicalisation and cross-border financial flows.

Emerging financial technologies are also becoming part of the risk equation.The assessment identified vulnerabilities linked to virtual assets and virtual asset service providers an area receiving growing attention from financial regulators worldwide.

Although the risk associated with these platforms was rated between low and medium, authorities say monitoring digital financial channels will become increasingly important as technology reshapes financial transactions.

The study also examined risks associated with legal entities and ownership structures.

Money laundering risks related to legal persons were rated medium-high, highlighting the importance of transparency around beneficial ownership to prevent shell companies being used to conceal illicit financial flows.

In contrast, risks associated with non-profit organisations, financial inclusion products and certain financial services were rated between low and medium.

Experts say these findings illustrate the delicate balance policymakers face between expanding financial inclusion and preventing financial systems from being exploited by criminal networks.

The report recommends stronger institutional coordination and more targeted regulatory oversight to address these challenges.

Authorities have already outlined plans to update Sri Lanka’s national anti-money laundering and counter-terrorism financing strategy for the 2026–2030 period.

Financial institutions and other organisations governed by the Financial Transactions Reporting Act No. 6 of 2006 have also been advised to integrate the report’s findings into their internal risk assessments.

Analysts say the next phase of reforms will determine how effectively Sri Lanka can align its regulatory framework with global standards while safeguarding financial stability.

With financial crimes becoming more sophisticated and increasingly digital, maintaining strong monitoring systems and international cooperation will remain central to protecting the country’s financial sector.

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.

A major financing commitment from the Asian Development Bank is poised to influence Sri Lanka’s economic trajectory over the next several years, but analysts say the success of the initiative will depend heavily on policy execution and structural reforms.

The development lender announced it is prepared to provide more than $1 billion annually to Sri Lanka between 2026 and 2029 following high-level discussions between ADB President Masato Kanda and Prime Minister Harini Amarasuriya in Manila.

The funding package is designed to support macroeconomic stability, expand private sector activity, and strengthen human capital through education and skills development. It also aims to improve the country’s infrastructure resilience an increasingly urgent priority following the damage caused by Cyclone Ditwah.

One of the most ambitious components of the ADB’s support involves a large-scale digital transformation initiative. The program is intended to modernise Sri Lanka’s digital ecosystem, encourage innovation, and unlock new opportunities within the country’s technology-driven sectors.

Economists say digitalisation could boost productivity and improve government service delivery, but warn that such initiatives require consistent regulatory reforms and investment in digital infrastructure.

The ADB is also backing Sri Lanka’s potential entry into the Regional Comprehensive Economic Partnership. Membership in the Asia-Pacific trade agreement could significantly expand the country’s access to regional markets and strengthen its position within global supply chains.

However, trade analysts point out that deeper integration into the RCEP framework will require Sri Lanka to upgrade its competitiveness, streamline trade regulations, and align standards with regional partners.

The meeting between the two leaders also emphasised inclusive economic development. During discussions linked to the ADB’s International Women’s Day program, both sides highlighted women’s economic empowerment as a key development priority.

The bank has long served as an implementing partner of the Women Entrepreneurs Finance Initiative, which supports women-led businesses by improving access to finance, strengthening entrepreneurial skills, and promoting policy reforms.

Sri Lanka has already taken steps in this direction. In March 2025, the country became one of the first to adopt the Women Entrepreneurs Finance Code at a national level, a framework designed to improve financial inclusion for women entrepreneurs.

Meanwhile, Prime Minister Amarasuriya also participated in discussions facilitated by the ADB on strengthening the country’s workforce skills. These talks explored collaboration with the Association of Southeast Asian Nations to align skills and qualification frameworks, as well as potential cooperation with the Philippines on technical and vocational education and training.

While the funding commitment signals strong international backing, economists caution that its long-term benefits will depend on how effectively Sri Lanka translates development financing into sustained economic reforms and productive growth.