Sri Lanka’s Export Resilience: A Mid-Year Reflection (Jan–July 2025)

Key Highlights (Jan–July 2025, EDB data)

• Total exports reached US$ 9.99 billion, with merchandise contributing US$ 7.80 billion (+7.22%) and services US$ 2.19 billion (+9.86%).
• July alone recorded US$ 1.64 billion, up 12.68% YoY.
• Top sectors: Apparel & textiles (US$ 3.08 b), tea (US$ 884 m), coconut (US$ 661 m), ICT/BPM (US$ 897 m), logistics (US$ 1.2 b).
• Strong markets: US, EU, India, and UK led export growth.
• EDB target: Positioned to meet the 2025 annual export goal of over US$ 19 billion.

In the opening seven months of 2025, Sri Lanka’s export sector demonstrated notable strength and adaptability. According to data from the Export Development Board (EDB), total exports (merchandise plus services) reached US$ 9.99 billion, marking a 7.79% increase over the same period in 2024. The impressive momentum continued in July, with export earnings for goods and services totaling US$ 1.64 billion, a 12.68% year-on-year rise.

Merchandise Exports: Core Strengths and Challenges

Merchandise exports delivered US$ 7.8 billion, a 7.22% growth compared to 2024. Within this:

• Apparel & Textiles continued as the largest contributor, with US$ 3.08 billion (+8.18%). Key markets included the US (+3.16%), UK (+5.76%), and the EU (+17.9%).
• Tea exports grew 8.92% to US$ 884 million, led by packet tea demand.
• Coconut-based products surged 37.3% to US$ 661 million, thanks to oils, milk powders, and desiccated coconut.
• Spices and essential oils rose 10.5% to US$ 245 million.
• Food & beverages also gained momentum, with 22.6% growth (US$ 340 m).

However, some categories faced setbacks: rubber products (–4.05%), seafood (–4.8%), and electronics (–1.57%), showing vulnerabilities in demand and competitiveness.

Services Exports: The Emerging Growth Engine

Services exports totaled US$ 2.19 billion, growing faster than goods at +9.86%.

• ICT/BPM services contributed US$ 897 million (+7.23%).
• Transport & logistics surged 21.24% to US$ 1.2 billion, highlighting Sri Lanka’s role as a regional hub.

This surge reinforces the growing knowledge-based economy, suggesting that services will increasingly shape the country’s export profile in years to come.

Global Markets & Diversification

Sri Lanka’s export destinations show encouraging diversification:

• United States: US$ 1.71 billion (+4.29%), still the largest buyer at 23% of total exports.
• India: Now the second-largest market, with exports up 26.97% to US$ 624 million.
• United Kingdom: US$ 565 million (+7.26%).
• EU region: Overall +15.64%, with Germany, Italy, and the Netherlands recording double-digit gains.
• FTA partners India & Pakistan: Together accounted for 8.2% of exports, rising 24.38% to US$ 667 million.

Sri Lanka Merchandise Exports by Key Markets

Source: Export Development Board (EDB)

The table highlights Sri Lanka’s reliance on traditional markets such as the US and EU, but also shows India’s growing share—reflecting the importance of regional FTAs. This diversification reduces dependency risk but calls for deeper engagement in new markets to sustain resilience.

Outlook: Can Sri Lanka Sustain the Momentum?

With exports nearing US$ 10 billion by July and targets on track for 2025, Sri Lanka’s exporters have shown resilience in uncertain times. Growth in services exports—particularly ICT and logistics—provides a new frontier, while traditional sectors like apparel, tea, and coconut continue to anchor merchandise earnings.

Yet the question remains: can Sri Lanka maintain this pace in the face of global headwinds—rising protectionism, supply chain shifts, and geopolitical volatility—or will these external shocks slow the momentum?