As Sri Lanka pursues an ambitious target of US$ 36 billion in export earnings by 2030, exporters are urging authorities to address a series of long-standing regulatory, operational and policy issues that affect competitiveness across several sectors identified as priorities for the country's export growth agenda.

The National Chamber of Exporters of Sri Lanka (NCE) noted that many of these concerns have been raised repeatedly with relevant authorities over a number of years, yet remain unresolved despite industry consultations, stakeholder discussions and multiple policy engagements.

The concerns come at a time when Sri Lanka has launched the National Export Development Plan (NEDP) 2026-2030, which targets US$ 28 billion in merchandise exports and over US$ 8+ billion in services exports. Achieving this objective will require annual export growth of approximately 10-12%.

Sri Lanka's total exports, including merchandise and services, reached US$ 4.31 billion during the first quarter of 2026, recording growth of 1.59% compared with the same period of last year. While exporters welcome the positive momentum, they highlight that unresolved bottlenecks impose additional costs, delays and uncertainty.

Common concerns

A recurring concern raised across several industries is the slow pace of administrative reform. Delays in approvals, manual documentation processes, inconsistent regulatory practices and the absence of fully integrated digital systems have been raised as serious issues impacting export growth.

Another crippling challenge raised across several export sectors is the growing shortage of skilled and semi-skilled labour , affecting production capacity, expansion plans and the ability to meet delivery commitments in international markets. This issue is highly pronounced in several sectors. For example, in the boat-building industry, exporters report employee attrition levels of nearly 80% in specialised trades such as fibreglass moulding, marine electrical work and technical fabrication, largely due to overseas migration and competition for skilled labour.

At the same time, it is no longer confined to individual industries but has become a broader competitiveness issue affecting the country's export sector.

NCE members have therefore called for a streamlined framework that would allow exporters to recruit foreign workers when local labour shortages cannot be addressed through domestic recruitment. No clear mechanism currently exists to facilitate the timely importation of labour for industries facing acute workforce shortages.

Coconut industry

The coconut industry recorded one of the strongest performances during the first quarter of the year, and export earnings from coconut and coconut-based products increased by 21.38 % to US$ 406.28 million during January–April 2026

Despite this performance, exporters engaged in higher-value coconut fibre products face difficulties in obtaining approval to import coir bristle fibre during periods of local shortages, even in situations where the Controller General of Imports and Exports has confirmed that coco fibre under the relevant HS code is not a restricted item. The availability of suitable fibre has become constrained as coconut husk is diverted to alternative applications, while traditional fibre preparation methods require lengthy processing periods and face labour shortages due to declining participation in the trade. Moreover, shortages of suitable raw material have affected production and export orders, requiring approval to import coir bristle fibre during shortage periods to enable manufacturers to continue servicing export markets and expanding value-added exports.

Forestry and floriculture

Currently, Sri Lanka’s floriculture export contribution to merchandise exports represents 0.1%, accounting for a value of USD 5.3 million in 2026 thus far. One major issue in the sector is permit-related challenges that affect operations, as restrictions on importing new mother plant varieties limit ability to upgrade planting material, despite the availability of controlled greenhouse and tissue-culture propagation methods.

Delays in obtaining Forest Department approvals for nursery-grown and tissue-cultured plants affect exporters servicing international orders and permits are required even for plants cultivated within commercial nurseries and, in some instances, for tissue-cultured plants that originate overseas, are multiplied locally and subsequently re-exported.

The administrative burden created by requirements to obtain separate permits for individual consignments, including the continued reliance on paper-based submissions despite previous discussions on digitisation is another bottleneck. Delays become especially  problematic during holiday periods due to limited permit issuance schedules. The sector has proposed reverting to the pre-2022 procedure under which permits were restricted to specifically listed species, while also implementing a previously agreed Gazette intended to streamline approval processes.

The mineral sector

Exports of Mineral and Mineral-Based Products increased by 6.79% in April 2026 compared to the same period in 2025. The sector has also been identified as a priority sector under the NEDP and the recently introduced a National Mineral Policy. However, policy certainty is vital given the significant investment procedures associated with mining projects.

One of the key concerns is the royalty structure applied to mineral exports, which are calculated on the final export value, effectively applying royalties to labour, power, transport, processing and other value-added activities rather than only to the extracted mineral. This discourages value addition and reinvestment and has contributed to a decline in export earnings. For example, the decline from approximately US$ 45 million in 2022 to around US$ 25 million in 2024. Changing royalty calculations to mine gate value or average local sale price to encourage downstream processing and investment is a serious requirement.

The industry has also raised concerns regarding short and inconsistent mining licence durations, noting that licences are frequently issued for periods that do not support long-term investment planning. Exporters are calling for standardised licence periods of 15 to 20 years based on ore reserves, mine size and production capacity, in line with international practice. Concerns have also been expressed regarding delays in obtaining approvals, barriers to accessing mineral deposits, shortages of raw material and the absence of a single-window clearance mechanism. There is also the need for clearer and commercially practical definitions of value addition, longer export licence validity periods, improved access to updated mining licence information, online royalty payment systems and more efficient handling of export documentation. Moreover, uncertainty in policy implementation and approval processes has affected investor confidence and delayed planned investments.

Boat-building industry

The boat-building industry has developed into a specialised export manufacturing industry serving international markets. The industry also showed notable growth, reaching 8.31% during the January-April period, compared to the same period in 2025. However,  infrastructure constraints, workforce shortages and regulatory approval delays  affect competitiveness in the global market.

The absence of specialised waste disposal facilities for glass reinforced plastic materials, limited marina infrastructure and transport challenges associated with moving oversized vessels are key concerns. Delays in obtaining approvals from agencies responsible for standards certification and telecommunications equipment also contribute to production disruptions and additional costs. The sector has reported high levels of employee reduction in specialised trades such as fibreglass moulding and marine electrical work due to overseas migration. Exporters are calling for official recognition of boat-building as a priority industry, investment in specialised infrastructure, workforce retention measures and a single-window digital clearance platform integrating approvals from relevant agencies.

Logistics and freight forwarding

Meanwhile, Sri Lanka’s Transport and Logistics sector recorded a 23.68% decline in the January-April period in 2026, in contrast to the same period in 2025. Trade facilitation is another area where exporters report continued challenges. This means that operational inefficiencies affect export competitiveness despite Sri Lanka's strategic location and the country’s target to improve the country’s position as a regional logistics hub.

Containers arriving at terminal facilities during late-night hours remain idle until Customs officers resume duty, resulting in avoidable waiting charges and shipment delays. Moreover, delays in Customs Declaration Note amendments, manual registration procedures and gate-in failures related to documentation requirements are key concerns. At the same time, delays in obtaining E-Phyto certificates, limited responsiveness during peak export periods and sample testing lead times of several days can affect cargo readiness and lead to vessel rollovers. On top of these issues, the absence of synchronised operations among terminals, Customs and regulatory agencies during holidays and outside normal working hours add to the sector’s burdens. They have proposed round-the-clock coordinated operations, greater digitalisation, service-level benchmarks, real-time approval visibility and stronger accountability across agencies.

From the Fresh & Processed Agriculture Sector

Fresh and processed agriculture exporters have also raised concerns regarding packaging-related import constraints. Local supply of glass bottles is insufficient to meet the requirements of food processors, making imports necessary to maintain production and fulfil export orders.

However, the requirement to convert foreign exchange earnings within a prescribed and limited timeframe reduces their flexibility to strategically schedule payments and negotiate favourable terms with overseas suppliers. As a result, processors are constrained in their ability to secure competitive pricing for specialised packaging materials.

This weakens the industry’s bargaining position, limits opportunities to benefit from exchange rate movements and bulk-purchase discounts, and increases packaging costs. These additional costs ultimately affect the competitiveness and profitability of Sri Lanka's export-oriented food processing industry.

Customs

Customs-related concerns have similarly been raised by exporters in multiple sectors. The NCE notes that clearance procedures can take a minimum of seven days, while frequent ASYCUDA system disruptions, limited weekend clearance for non-perishable cargo and inconsistent interpretations of HS classifications create uncertainty and additional costs. Exporters have called for 24/7 clearance mechanisms, improvements to system reliability and improved staff training to support more consistent application of procedures.

Other concerns

Another key concern highlighted is the implementation of India's BIS Quality Control Orders. While exporters acknowledge the importance of quality standards, members have raised concerns regarding certification costs, mandatory bank guarantees, audit-related expenses, recurring compliance obligations, material realignment requirements and the absence of reciprocal arrangements. The total  burden of these requirements is resulting in serious non-tariff barriers for Sri Lankan products entering a key export market.

The NCE has also continued to advocate improvements in intellectual property protection and trademark registration. While discussions on the Madrid Protocol have progressed, domestic trademark registration processes require further improvement, registrations can take several years. The Chamber has called for the fast-tracking of accession to the Madrid Protocol, greater digitalisation of registration processes and additional resources to improve processing efficiency.

While the country has recorded notable export growth, Sri Lankan exports also continue to face structural competitiveness challenges. Sri Lanka's participation in global value chains stood at 35.27% in 2022, considerably lower than regional competitors and only 41.8% of export relationships established in 2020 remained active through 2024, highlighting the importance of strengthening exporter capacity and improving the overall business environment.

Solving these sectoral issues becomes more pressing given Sri Lanka's export ambitions. Industry stakeholders note that achieving this level of growth will require more than identifying priority sectors. The NCE emphasises that policy ambitions must be accompanied by practical reforms that address long-standing obstacles faced by exporters. Timely implementation of the discussed solutions will be vital if Sri Lanka is to achieve its export growth targets and expand its position in international markets.