Market oppourtunities are few, although with signs of economic recovery and lifting of import restrictions, conditions are expected to improve.  Sri Lanka is a lower middle-income country with a sizeable middle class that seeks U.S. and Western products and services.  The country has significant infrastructure needs in public transportation, ports, public housing, water and power projects.  Due to its unsustainable public debt situation, in 2022 the government mandated all development initiatives be on a build-own-operate-transfer basis with no debt capital funded projects.  The country seeks significant investment in renewable energy projects for long term energy security.  As a hub for tourism, Sri Lanka also requires a range of services and high-end products.  Sri Lanka also seeks to position itself as a logistics and technology hub for the region, which creates an opportunity for information technology equipment and services exports.  Priority sectors include:

· Energy and Infrastructure Development:  Engineering, construction and equipment products and services for road, power plants, sewage, water, rail, port, and airport projects.

· Real Estate and Construction:  The country’s construction sector was a key economic driver, however the economic crisis has stalled progress with many companies reporting lack of projects and inability to continue ongoing contracts due to steep cost escalation.

· Textiles:  Sri Lanka imports approximately $2.8 billion of textiles and yarn annually for the apparel industry and requires a range of equipment and services.

· Agriculture:  Import demand for wheat grain, lentils, cotton yarn and input items for animal husbandry including maize and soybeans; and development of agriculture-related infrastructure, including cold-storage facilities.

· Telecommunications and Technology:  Sri Lanka aims to become an information technology hub and 5G trials are underway.  In addition, the government has embarked on a digitization campaign as part of its efforts to combat endemic corruption and facilitate FDI, focusing on systems upgrades for government bodies and the financial sector for greater conformity with global standards.

Market Entry Strategy

U.S. companies that offer competitive pricing and quality products and services have successfully entered the market.  Local agents are helpful to enter the Sri Lankan market.  The U.S. Embassy can assist U.S. companies in finding local agents and distributors for a fee through U.S. Foreign and Commercial Service matchmaking and due diligence services.  Sales to the Government of Sri Lanka may require a local agent.  For firms investing locally, the Board of Investment (BOI) offers information regarding investment incentives and other services.