Indian Investments in Sri Lanka

Indian FDI in Sri Lanka commenced in 1982 with Ashoka Leyland commenced its bus assembly plant in collaboration with the Government of Sri Lanka. However inflow of substantial Indian FDI started only in the 1990s (1995 onwards) with the investments in construction, materials-steel, cement, paint industries and roofing sheets. The 3rd wave of DFI followed the Indo-Lanka FTA in 2000 and the developments in the air tariff and relaxation of visas for Indian nationals. In fact 65% of the existing FDI has been realized only after year 2000. India is ranked within the top 05 foreign investments sources for Sri Lanka and India has also been emerging as a source of FDI oversea.

Why Indian Investors should go to SRI LANKA?

  • You take your Investment to one of the best ‘strategical trading hub’ where, East meets West.
  • You benefited from the one of the best ports in South Asia, where almost all international vessels are called.
  • Reaching Indian ports is much cheaper and easy through Colombo port than moving within India.
  • Competitive status of Human Development and living standards
  • You will have fully-fledged instruments such as
  • Constitutional Guarantee for FDI (Article 187)
  • Indo Lanka Free Trade Agreements (ILFTA) – since 2000
  • Investment Promotion & Protection Treaty – since 1997
  • Double Taxation Avoidance Treaty – since 1983

 What is the Size of Market available for Indian Investors?

You can approach your own Indian market with no import duties under Indo – Sri Lanka FTA.
Why not Pakistan! Make use the opportunities under Pakistan – Sri Lanka FTA.
Be an early entrance to supply SAARC nations being in a Central location making use of South Asia Free Trade Agreement (SAFTA) that is to be full swing from 2016.
Be ready to enjoy special concessions available to Sri Lanka to access China and South Korea under the Asia – Pacific Trade Agreement (APTA)
Accesses European Market through concessions available under GSP (General System of Preference)

 Investment Opportunities

Some targeted (potential) investments are,

1. Manufacture of non-traditional goods for export during deemed exports.
2. Export oriented services.
Garment washing and finishing plants.
– Embroidery services.
– Ship repairs and ship breaking.
– Textile dying and finishing plants.
– Textile printing.
– Testing of fabric.
– Computer aided designs for garment and other industries.
– Bunkering services.
– Production of films.
– Air cargo services.
– International passenger services.
– Repairing of containers.
– Vacuum packing of garments.
3. Manufacture of industrial tools and/or machinery for the local market.
4. Small-scale infrastructure projects.
5. Information technology (IT), IT enabled Services & Training institutes, BPO/KPO Industry.
6. Regional operating headquarters.
7. Research and Development.
8. Agriculture and/or Agro-processing other than processing of Black tea.
9. Export Trading Houses.
10. Large-scale infrastructure.
    – Power generation.
– Transmission and distribution.
– Development of high ways, sea ports, airports, railways & water services.
– Establishment of industrial estates.
– Any other infrastructure.

11. Large-scale (new/existing) projects.
12. Setting up of textile manufacturing zones

Sri Lanka Investment Guide Investment-Guide-2022-31.03.2022