April 20, Colombo (LNW): SriLankan Airlines has formally opened a bold front in its dealings with European aerospace giant Airbus, seeking a multi-faceted compensation package that could include a return of over US$ 23 million in pre-delivery payments and the free delivery of up to four state-of-the-art A330neo aircraft.

The move marks a dramatic turn in a relationship long plagued by controversy, unfulfilled agreements, and allegations of corruption.

The Colombo-based carrier’s demand for financial redress centres on its troubled acquisition of Airbus A330-300s and A350-900s, a procurement announced in 2013 that never fully materialised. Whilst six A330-300s were eventually delivered—mostly through the intervention of third-party lessors—the A350-900 component of the order failed to come to fruition.

The airline now argues that this incomplete arrangement, coupled with mismanagement and alleged irregularities during the initial negotiation process, justifies extensive reparations.

At the heart of SriLankan Airlines’ assertive stance is its new Chairman, who is reportedly spearheading a push to recoup losses from what he has described as an unjust and compromised procurement process.

The carrier is not only demanding reimbursement of US$ 23.3 million in earlier payments but also expects Airbus to provide a fleet of A330neo aircraft without charge—an extraordinary request in a highly competitive global market.

In total, the compensation being sought exceeds US$ 200 million, a figure that has reverberated throughout the aviation sector. Industry insiders note that whilst aircraft manufacturers occasionally offer rebates or financial adjustments to preserve relationships, such high-stake demands—particularly those involving the no-cost provision of wide-body jets—are rare.

The airline’s aggressive push for redress is deeply rooted in a broader effort to distance itself from a legacy of political interference and questionable dealings. Previous investigations into SriLankan Airlines revealed a culture of financial misconduct, including instances where senior figures allegedly accepted kickbacks in return for purchasing aircraft at significantly inflated prices, bypassing the bulk discounts typically afforded to major carriers.

These historical burdens continue to shape the airline’s present-day struggles. The CEO position remains vacant, and internal leadership instability has become a hallmark of the organisation.

Moreover, the company’s deteriorating operational capacity has coincided with broader national political unrest, adding further strain to an airline already grappling with structural inefficiencies and mounting debt.

In parallel with its negotiations with Airbus, SriLankan Airlines is also pursuing discussions with Rolls-Royce, the engine manufacturer implicated in the original procurement saga.

The airline suggests that engine-related shortcomings contributed to the underperformance of the previous fleet, and it is now exploring avenues for restitution on that front as well.

Airbus, for its part, has remained tight-lipped on the ongoing deliberations. The manufacturer is said to be weighing its options carefully, conscious of both reputational risks and the precedent any concession might set.

Whilst Airbus has, in the past, been entangled in legal disputes with other airlines over similar allegations, SriLankan’s demands—particularly the insistence on free aircraft—could test the boundaries of customary industry settlement norms.

As SriLankan Airlines attempts to rehabilitate its image and restructure its operations, securing meaningful compensation from its former suppliers is seen as essential to rebuilding both finances and credibility.

However, with deep scars from years of mismanagement and a history of politically driven decision-making, the path to resolution may yet prove arduous.

By: Staff Writer

April 20, Colombo (LNW): The Global Franchise Forum (GFF) will hold its Sri Lanka edition on 27 April at the Sheraton Hotel, Colombo, bringing together global franchise leaders, investors, and entrepreneurs to explore opportunities in the country’s growing market.

Backed by key organisations such as the Indo-Lanka Chamber of Commerce, the Ceylon National Chamber of Industries (CNCI), the International Chamber of Commerce (ICC) Sri Lanka, the Colombo Chamber of Commerce, and the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL), the event highlights a collaborative effort to promote international franchise growth and regional economic development.

Positioned strategically as a gateway to South Asia, Sri Lanka offers promising prospects with its strengthening economy, rising middle class, investor-friendly environment, and expanding consumer base. Sectors such as hospitality, retail, education, and healthcare are particularly attractive to global franchises seeking to enter emerging markets.

The forum will feature a franchise showcase presenting global brands aiming to expand into Sri Lanka, alongside personalised business meetings, panel discussions, and seminars led by industry experts. Networking opportunities will allow entrepreneurs, investors, and corporate leaders to build strong business connections. The event will conclude with an awards night celebrating excellence in franchising.

Franchise India Group Chairman Gaurav Marya emphasised the event’s strategic importance, describing it as a key platform for facilitating partnerships between global brands and local businesses. “The Global Franchise Forum 2025 in Sri Lanka is essential for entrepreneurs, investors, and business owners looking to expand. It enables meaningful connections that support seamless franchise growth in high-potential markets,” he said.

Highlighting the country’s improving economic outlook, Marya noted that the Central Bank projects a GDP growth of 3.3% for 2025. He added that Sri Lanka attracted over $1.5 billion in Foreign Direct Investment (FDI) last year, indicating renewed investor confidence. The island nation’s economic recovery is further supported by a growing urban population and expanding commercial sectors.

By creating links between international franchisors and local entrepreneurs, the GFF aims to foster sustainable partnerships that generate employment, encourage knowledge sharing, and stimulate innovation. The forum’s objectives align with Sri Lanka’s national goal of enhancing FDI inflows and positioning itself as a competitive business destination in the South Asian region.

By: Staff Writer

April 20, Colombo (LNW): The Tea Exporters Association (TEA) of Sri Lanka has voiced serious concern over the recent imposition of reciprocal tariffs by the United States, warning of significant negative impacts on the country’s tea exports. The US, one of the world’s largest tea importers, brought in over $500 million worth of tea in 2024, and Sri Lanka plays a prominent role in its hot tea market segment, accounting for 20% of the share.

In 2024, Sri Lanka exported 6.4 million kilograms of tea to the US, valued at $45 million—a 22% increase in volume and 11% in value compared to the previous year. Notably, 65% of these exports were in value-added forms such as tea bags, packets, and instant tea, with an average Free on Board (FOB) price of $7 per kilogram, well above the national average of $5.83.

However, the introduction of US tariffs has disrupted this growth. As of April 11, 2025, around 296,000 kg of Sri Lankan tea worth $3.24 million was en route to the US, while an additional 21,000 kg, valued at nearly $480,000, awaited clearance at US ports. Following the tariff announcement, confirmed orders totaling 226,000 kg and valued at $3.14 million were suspended by US buyers. Although some orders are now being restored and US importers are clearing shipments by paying the 10% duty, exporters remain anxious about the long-term outlook.

Sri Lanka competes with tea-producing nations like India, Kenya, and Vietnam in the US market. The 90-day grace period currently in place has brought temporary relief. However, if the tariffs are not revoked, the higher 44% duty on Sri Lankan tea—compared to 26% on Indian and 10% on Kenyan tea—could cause buyers to shift to these competitors, threatening Sri Lanka’s market share.

This situation poses a serious threat to the nation’s tea industry, especially given that 4 million kg of value-added tea may not find an alternative market quickly. A decline in US orders would undermine Sri Lanka’s 2025 tea export revenue target of $1.5 billion and negatively affect incomes of thousands of producers, including smallholder farmers.

In light of these challenges, the TEA is urging the US to consider the socio-economic importance of the tea sector. With over 2 million Sri Lankans directly dependent on tea export income, and considering tea as a globally essential commodity, TEA appeals for either the lowest possible or tariff-free access to the US market to safeguard livelihoods and sustain growth.

By: Staff Writer

April 20, Colombo (LNW): Sri Lanka stands to suffer a significant economic setback, with potential losses reaching up to US$ 1.23 billion if it loses access to the European Union’s Generalised Scheme of Preferences Plus (GSP+) trade benefits, according to a recent study by the Institute of Policy Studies (IPS). The preferential trade scheme has played a critical role in supporting Sri Lanka’s export economy, and its removal could trigger a dramatic shift in trade dynamics with the EU.

The IPS study warns that the withdrawal of GSP+ would force Sri Lanka’s exports to face Most Favoured Nation (MFN) level tariffs, resulting in a 36.7% drop in exports to the EU.

The erosion of GSP+ privileges would hamper the country’s efforts to diversify its exports into high-tech products, such as transformers, which alone made up 50% of Sri Lanka’s EU exports in 2019.

A loss of GSP+ could cause a 10% drop in transformer exports, directly affecting one of the nation’s more technologically advanced sectors.

Among the hardest-hit industries would be the wearing apparel sector. While it has not yet fully capitalized on the benefits of GSP+, this sector could face tariff increases of nearly 10 percentage points if the scheme is revoked.

This would not only reduce export volumes but also severely impact employment across the manufacturing sector.

The IPS report estimates that about 4.99% of Sri Lanka’s formal industrial workforce could be adversely affected due to the anticipated decline in EU demand. This includes a significant 13.47% of employees in the apparel industry.

 In total, 73,574 workers could become vulnerable, with women and low- to medium-skilled workers accounting for 65.65% of those at risk.

Amid these warnings, the Pathfinder Foundation recently hosted a high-level Ambassador’s Roundtable with EU Ambassador Carmen Moreno, who highlighted the strategic importance of Sri Lanka’s continued engagement with the GSP+ facility.

She stressed that the GSP+ is not only a gateway for tariff-free access to the EU but also a framework built on mutual commitments, including the ratification and implementation of 27 international conventions related to human rights, labor standards, environmental protection, and good governance.

Ambassador Moreno emphasized that GSP+ beneficiary countries must move beyond merely signing these conventions—they must ensure proper implementation and consistent compliance. She further stated that Sri Lanka should adopt an industrialization-focused policy, rather than a purely trade-based approach, to effectively utilize the full potential of GSP+ by expanding and diversifying exports.

For Sri Lanka, the GSP+ facility has been a vital economic lifeline since 2005, particularly in maintaining its competitiveness in EU markets.

With mounting economic challenges and rising global competition, losing this preferential access could spell disaster for the island nation’s export economy, employment landscape, and future growth prospects. Immediate policy actions and strengthened diplomatic efforts are essential to preserve this critical trade relationship.

By: Staff Writer

April 20, Colombo (LNW): Sri Lanka needs a consistent industrial policy providing concessions for the manufacturing sector to become locally and globally completive by producing innovative and quality products, several domestic industry leaders emphasised.

They urged the government to clear the way towards building a broad-based export industry by introducing national industry policy soon do away with protectionism as the tax on imports is tax on exports.

Successive previous governments have introduced industrial policies, but those were inconsistent and in every budgets, taxes and Customs duties had been changed without consultations with industrial stake holders, Chairman and Managing Director of Tantri Trailors (Pvt ) Ltd  Athula Haputantri, said

However he noted that the ruling NPP has formulated an industrial policy document by appointing advisory committees consisting of 21 industrial sectors for their manifesto.

The government is set to introduce this policy following discussions with industry stake holders which is conducive for the manufacturing sector, he disclosed.      

A Class-1 Marine Engineer by profession, Mr. Haputantri has been instrumental in driving Tantri Trailers to the forefront of Sri Lanka’s manufacturing and export sector. Under his leadership, the company has pioneered the manufacturing and export of value-added trailers, reaching over 40 countries worldwide.

Beyond trailers, Tantri has expanded into diverse areas, including telecommunications towers, tankers, construction plants, storage tanks, silos, overhead gantries, cranes, and heavy steel fabrications. It has also refurbished 300 railway coaches saving valuable foreign exchange.

Past government policies have typically formulated by ministry officials, and there has not been a common framework to support multiple initiatives for different industries he pointed out.

All the policy that affects industry is made in the dark, on guesswork without considering the number of industries  , manufacturers  ,sectors and their contributions to the national economy,

No investor will invest in an industrial venture in Sri Lanka without a globally competitive national industry base and consistent national policy, he claimed.   

The policy document will have to be preceded by a process to collect data on Sri Lanka’s industrial sector and ascertain the strengths and weaknesses of the industry

The main aim would be to move Sri Lanka from its dominance in low technology industries such as apparel to high technology manufacturing and engineering where the country could earn more.

Citing an example Mr Haputantri noted that his company manufactures 100 trailers per annum and 50 percent of it for export market earning foreign exchange with 650 direct employees and 1500 indirect employees working at various sites. The share of industrial exports contribute to the GDP, he added.   

Sri Lankan industrialists should focus attention on high quality standard products for the export market, he said adding that their innovations will have to cater the needs of consumers.   

The government has taken measures to upgrade the quality of manufacturing, promote eco-friendly methods, and introduce modern technologies.

It has been focusing on entrepreneurship, infrastructure investment, and green industrial conduct. Steps include amending the Industrial Promotion Act and enforcing standard operating procedures in domestic vehicle assembly, a top ministry official explained.

With the aim of making products internationally competitive, Sri Lanka has developed a strategic National Quality Infrastructure (NQI) Enhancement (NQI) Strategy.

This approach emphasizes the provision of high-performance services that enable business compliance with international market requirements, enhance environmental sustainability, and protect consumers.

Key focus areas include revising the legal framework, strengthening institutional coordination, and building awareness about quality among the private sector and general public.

By: Isuru Parakrama

April 20, Colombo (LNW): Sri Lanka has formally commenced a new round of discussions with the International Monetary Fund (IMF) in Washington, as part of the ongoing engagement under the Extended Fund Facility (EFF) arrangement aimed at stabilising the island’s economy.

The latest negotiations mark the fourth review of the programme, which has been instrumental in providing financial and technical support during one of the country’s most turbulent economic periods in recent history.

The Ministry of Finance has confirmed that a senior-level delegation, including representatives from both the Ministry and the Central Bank, has travelled to the United States to engage in what are expected to be comprehensive and technically detailed deliberations.

The team is tasked with reviewing policy progress, structural reforms, and fiscal consolidation targets agreed upon during earlier phases of the EFF.

Deputy Minister of Finance Prof. Anil Jayantha Fernando noted that the review sessions are taking place in a critical global and regional economic context, where maintaining macroeconomic discipline and advancing domestic reforms remain essential for long-term recovery and resilience.

These talks will assess Sri Lanka’s performance in meeting previously agreed benchmarks, particularly in areas such as public financial management, tax reform, debt restructuring, and governance improvements.

The outcome will determine the release of the next tranche of financial assistance, which could be pivotal in maintaining investor confidence and sustaining foreign reserves.

In recent months, the government has accelerated efforts to fulfil IMF conditions, including controversial but necessary fiscal measures, such as tax increases and the rationalisation of public spending.

These reforms, though often politically unpopular, are widely seen as critical for regaining debt sustainability and rebuilding international credibility.