By: Staff Writer

March 09, Colombo (LNW): Sri Lanka’s domestic and regional aviation sector is witnessing remarkable growth in 2025, with increased connectivity and expansion of air routes enhancing travel accessibility.

The country has been focusing on strengthening its air transport infrastructure, fostering regional tourism, and facilitating economic growth. With improved airport facilities, growing airline operations, and enhanced regional ties, Sri Lanka is emerging as a key aviation hub in South Asia.

One of the significant developments in this transformation is the launch of new regional air routes. IndiGo’s announcement of a direct flight between Tiruchirappalli (Trichy) in Tamil Nadu and Jaffna in northern Sri Lanka is a testament to this progress. This initiative marks another step toward strengthening bilateral travel between India and Sri Lanka while catering to the rising demand for seamless air connectivity.

IndiGo, one of India’s leading airlines, has confirmed that its daily direct flights between Trichy and Jaffna will commence on March 30, 2025. This new service aims to address the increasing passenger traffic between the two regions, offering more travel options for business, leisure, and religious purposes.

Expressing enthusiasm about the new route, Vinay Malhotra, Head of Global Sales at IndiGo, stated, “We are delighted to extend our operations in Sri Lanka with the exclusive Tiruchirappalli-Jaffna route. Following the success of our Chennai-Jaffna service, this addition will further strengthen our regional network.”

He further emphasized IndiGo’s commitment to providing seamless travel experiences, stating, “With over 60 weekly flights to Sri Lanka from five major Indian cities—Bangalore, Chennai, Hyderabad, Mumbai, and Tiruchirappalli—we continue to focus on accessibility, affordability, and efficiency while maintaining our signature on-time and hassle-free services.”

Jaffna, located in Sri Lanka’s northern province, is renowned for its historical and cultural significance. The city attracts visitors eager to explore its rich Tamil heritage, notable landmarks such as Jaffna Fort, and spiritual sites like Nallur Kandaswamy Kovil. Jaffna’s vibrant festivals and unique cuisine further enhance its appeal as a tourist destination.

Tiruchirappalli, commonly referred to as Trichy, is equally significant for its cultural, educational, and industrial prominence. Known for landmarks like the Rockfort Temple and Sri Ranganathaswamy Temple, the city is a magnet for pilgrims and history enthusiasts.

Additionally, Trichy’s role as an educational and industrial hub, with institutions like NIT Trichy and a thriving manufacturing sector, underscores its importance as a key gateway to South India.

The launch of direct flights between Trichy and Jaffna is expected to boost travel convenience, enhance trade opportunities, and foster cultural exchange. Travelers can book tickets for this route through IndiGo’s official website or mobile app, ensuring easy and efficient reservations.

 This new air link underscores Sri Lanka’s broader aviation ambitions, reinforcing its position as a dynamic regional aviation center and strengthening its ties with India and the wider South Asian region.

By: Staff Writer

March 09, Colombo (LNW): After a period of steady growth, Sri Lanka’s Information Technology (IT) sector encountered significant challenges in 2025, primarily due to increased taxation, talent migration, and financial burdens on IT services. The introduction of a 15% tax on IT services for international clients and an 18% Value Added Tax (VAT) on locally-developed software and electronic equipment has put the industry under considerable strain.

Impact of Taxation on IT Growth

The imposition of income taxes has triggered a substantial brain drain, particularly among mid-level employees crucial for business operations. With the removal of VAT exemptions and the subsequent 18% VAT increase, there is growing concern that IT companies may relocate abroad to mitigate tax-related expenses.

A report by the Information and Communication Technology Agency (ICTA) of Sri Lanka, in collaboration with the United Nations Conference on Trade and Development (UNCTAD), estimates that Sri Lanka’s digital economy is valued at $3.47 billion, contributing 4.37% to the country’s GDP. The ICT and Business Process Management (BPM) workforce is projected to reach 300,000, supporting a $3 billion industry by 2025, compared to its current $1 billion valuation.

Government Initiatives and Industry Concerns

The previous government earmarked Rs. 3 billion to establish a digital authority, tasked with spearheading the public sector’s digital transformation. Additionally, a Technological Innovation Council was proposed to foster collaboration among government bodies, research institutions, and the private sector. Another notable initiative involves creating a National Centre for Artificial Intelligence to drive economic and social transformation through emerging digital technologies.

Despite these measures, industry leaders warn of potential setbacks. PickMe Founder and CEO Jiffry Zulfer criticized the VAT policy, arguing that it could drive startups abroad and deter Foreign Direct Investments (FDIs). He highlighted that, since foreign software providers remain exempt from VAT, local businesses might opt to move operations overseas while still serving the Sri Lankan market. This shift, he stressed, would make investors wary of investing in Sri Lankan startups.

Cybersecurity expert Asela Waidyalankara pointed out that taxation is only one of many challenges facing the industry. Structural and policy inefficiencies also need to be addressed to attract foreign investments.

 He warned that increased VAT would drive up operational costs, particularly for startups, and called for a more business-friendly regulatory environment. He noted that Sri Lankan startups are already considering relocating to Singapore due to the lack of a conducive business climate.

The IT Sector’s Future Amid Economic Policies

Federation of Information Technology Industry Sri Lanka (FITIS) Chairman Indika de Zoysa voiced concerns about rising costs for hardware and locally-produced software, which could affect competitive pricing and slow down digital adoption. He warned that the new VAT policy might encourage black market transactions, exposing consumers to risks like poor product warranties and counterfeit goods.

FITIS has been in active discussions with the Ministry of Finance and the Ministry of Technology to reconsider VAT exemptions. De Zoysa emphasized that before 2005, Sri Lanka’s IT sector was subject to 15% VAT but was later exempted to promote digital expansion. He stressed the need for continued exemptions, citing policies in regional countries such as Malaysia, Singapore, Thailand, and Bangladesh, where IT-related services enjoy tax incentives to stimulate growth.

A major concern is that startups might relocate abroad due to tax burdens, especially since shifting IT operations requires minimal physical infrastructure. This could result in an immediate decline in foreign investments and economic contributions.

The Path to a Digital Economy

FITIS remains committed to the DIGIECON 2030 policy framework, which aims to expand the digital economy’s contribution to GDP from 4% to 15% by 2030. The framework focuses on advancing Industry 4.0 and Industry 5.0, fostering a sustainable, export-oriented tech hub, and creating a business-friendly investment climate. It seeks to leverage technology to enhance productivity, integrate into global value chains, and navigate the current economic crisis.

To achieve these goals, Sri Lanka must prioritize fostering a stable and encouraging environment for IT businesses. This includes tax policies that support growth while ensuring a competitive edge in the regional and global digital economy. Without such measures, the country risks losing valuable talent, investments, and its position in the rapidly evolving tech landscape.

By: Staff Writer

March 09, Colombo (LNW): The Department of Registration of Persons has procured 700,000 polycarbonate cards from Thales for its Electronic National Identity Card (e-NIC) initiative, scheduled for implementation by the end of the year. 

However, an additional 1.6 million cards are still required to meet national demand, according to M.S.P. Suriyapperuma, Director General of the department.

Following an eight-year delay, Sri Lanka’s e-passport project has also been revived with a contract awarded to a partnership between Thales, a global technology firm, and Just in Time Technologies (JITT).

Thales is currently working on the design aspects, and once finalized, the consortium will supply the first batch of 100,000 e-passports by July 2025, with an annual distribution target of one million. 

To address ongoing demand, 300,000 standard machine-readable passports (MRPs) will also be procured from Thales without issuing a new tender.

The project specifications require a software update to ensure that the e-passport supplier’s chip operating system, application, and hardware remain neutral, preventing dependency on a single vendor.

 However, the consortium has stated that their e-passports cannot be personalized using the existing Department of Immigration and Emigration (DIE) system, violating a key tender requirement. 

Additionally, the supplier has insisted that the government procure their Public Key Infrastructure (PKI) system, which is essential for e-passport functionality.

To address this issue, the Ministry of Public Security plans to submit a cabinet paper proposing the procurement of the Thales/JITT PKI system.

This proposal also includes personalizing e-passports through the supplier’s system on a ‘fee per passport’ model. If approved, the current personalization system—costing over Rs.1 billion in public funds—would be discontinued, and additional costs would be incurred for personalization services provided by the consortium.

he e-passports will include an electronic chip storing personal details, while a high-volume passport printing system, estimated at Rs.1.5 billion, will also be required.

The new e-NICs will integrate biometric features such as fingerprint, iris, and facial recognition, enhancing security and identification accuracy. 

Sri Lankan banks are already accessing the repository to verify client details, and the plan is to integrate the Sri Lanka Unique Digital ID project with the e-NIC system.

This initiative will assign unique identification numbers, consolidate various forms of identification, and include essential data such as birth certificates and tax identification numbers. Suriyapperuma emphasized that digitization allows for effective data collection and policy-driven decision-making.

A recent awareness program on the e-NIC initiative was conducted at the Information and Communication Technology Agency of Sri Lanka (ICTA) in Colombo. 

Under the patronage of Deputy Minister of Digital Economy Eranga Weeraratne, the event provided a platform for stakeholders to discuss challenges and strategies for seamless implementation.

 Additionally, the Registrar General’s Department is advancing efforts to establish a digital population registry in Colombo.

This electronic database will store fundamental details of all Sri Lankan citizens, facilitating streamlined life event registrations and improved data-sharing between government agencies. 

As part of this effort, digital birth certificates will be issued to individuals born after January 2021 in Colombo, complementing existing handwritten birth certificates.

This project, supported by the Civil Registration and Vital Statistics initiative, is a collaborative effort involving the Ministry of Digital Economy, the United Nations Development Programme, and the Asian Development Bank.