Major Industries in Sri-Lanka:

Meaning of Industry: - Industry means a group of same group of companies. In which

companies are producing same type of products.
In Sri-Lanka there are different types of major industries are working. Those are:
Rubber

Shipping

Tea

Apparel & Textiles

Coconut

Tourism

Tobacco

Cement

Telecommunication

Petroleum refining

Insurance

Information Technology

Banking

Construction

Tourism - Tourism is one of the main industries in Sri Lanka. Most of the tourists are attracted by
the islands famous beaches located in the southern and the eastern parts of the country and ancient
heritage sites located in the interior of the country and resorts located in the mountainous regions of
the country. Because of precious stones such as rubies and sapphires being frequently found and
mined in Ratnapura and its surrounding areas, this affect the major tourist for tourism.

The 2004 Indian Ocean Tsunami and the past civil war have reduced the tourist arrivals, from
years the ratio of tourist visitors are increase. In March 2008 the ratio is increased by 8.6%.1
Tea industry - The tea industry is one of the main industry in Sri-Lanka. Tea business is
operating under the Ministry of public estate Management and development. It became world
largest exporter in 1995 with a 23% share of global tea export, higher than the Kenya. The
central highlands of the country have a low temperature climate throughout the year and
annual rain fall and the huminidity levels that are suitable for growing tea. In present SriLanka has become one of the biggest country for exporting fair trade tea to the UK and other
countries also.
Apparel and textile industry: - Apparel Industry is exports mainly to United states and
Europe. In Europe labor cost is as compare to Sri-Lanka thats why they are importing from

http://en.wikipedia.org/wiki/Southern
13

Sri-Lanka. Around 900 factories of country serving Victorias Secret, Liz Claibone and
Tommy Hilfiger.
Rubber Industry: As the world's 6th

biggest exporter and 8th

largest natural rubber

producing country.
Coconut industry: - Sri-lanka was one of the leading coconut industry in the world and
exports its products in many region like European and Asian country but now a days its
market is down because of manifold reasons. Currently, there are more than one million acres
under coconut plantation and most of the lands have been underutilized throughout the
country. The reason being that an average number of trees for an acre is around 35 - 40 trees,
which is below the required level. Sri-lankas annual production 2.6 billion nuts and they
want to achieve target 3.5 billion with the promotion in cultivation of coconut by providing
subsidies to the North and Eastern region.
Tobacco industry: Tobacco has become a highly profitable commercial crop in Sri
Lanka.During the past decade, many incentives, such as technical advice to rural farmers,
provision of fertilizer and seeds etc., were given by CTC to promote tobacco cultivations.
CTC claims that they have generated nearly 300 000 jobs nearly 8% of the total in
Sri Lankabut official figures estimate that in there were only 8437 tobacco farmers in Sri
Lanka.Tobacco advertisements are not permitted in the electronic media, but indirect
smoking promotional scenes can be seen in telegrams on television.
Banking: The banking sector is monitored by the Bank Supervision Department of the under
the Banking Act, central bank of Sri-lanka permitted three types of financial institutions
Registered Finance Companies and Licensed Specialized Banks.

14

Shipping industry: The countrys shipping industry will continue its growth momentum as
several mega port development projects were launched during the last five years.
Government encourages growth in the shipping sector by giving them the polices and one of
the key policy initiatives introduced by the 2012 budget is to open free areas in the Colombo,
Hambantota and Trincomalee ports. This will help or boost for logistics related value added
services and could attract major FDIs. Investment in shipping industry raise to US$ 440
million in two years from 2011 while investment is expected to reach US$ 2.8 billion during
the period from 2017 to 2020.

Telecommunication industry: Sri-lanka Telecom (SLT) is a public profit seeking company

with 51% shares by providing services like Cellular mobile telephone , Paging service
,Stired& forward fax services.

Petroleum Refinery: Lanka IOC, Indian Oils subsidiary is the major supplier of lubricants
and greases to the three arms of the Defence of Sri Lanka. Lanka IOC is making phased to
provide world-class quality products and services to the Sri Lankan customers.23

Ratio to Private to Public Sector:

Industry

No. of Private

No. of Public

Ratio to Private to

Companies

Companies

Public company

Tea

33

10

77:33

Apparel

65:35

Rubber

34

24

59:41

Telecommunication

67:33

To find out ratio to private to public sector is important to know the economy condition of
particular industry. Mainly in the Tea industry there are private players are more in number
with compare to the public. And ratio of private to public is 33:10. Means there are 77%
private players and 33% public. And in the Apparel industry the ratio is 9:5. That means
private players are 65% and public 35%. This percentage reflects that major portion of this
industry is covered by private companies. In Rubber industry private to public ratio is
2

http://www.srilankabusiness.com
http://www.srilankabusiness

15

17:12. From this we can interpret that 59% is covered by private and rest means 41% covered
by public company.In Telecommunication sector the ratio is 1:2. From these we can
conclude that in telecommunication major players are public and it is 67% and private players
are 33%. It shows that telecommunication sector is restricted for the private company with
compare to the public company.
Major Players & their operations in each Industry:
1. Tourism: Major players in tourism industry are Acme Lanka (Pvt.) Ltd,Andrews Travel
Service Ltd.,AntonJayakodi Travels (Pvt) Ltd.,Columbus Tours (Pvt) Ltd.,Globe Jeter Travel
Services, Ncar Travel and Tours Ltd. Rus - Lanka Travels &Tours,Sunway Holidays etc.

2. Tea industry: There are mainly two players who produce tea in Sri Lanka. They are 4
4

Dilmah and Bogawantalawa.

Bogawantalawa: Dilmah is a family tea company founded by Merrill J. Fernando. Situated

about 150 km east of Colombo, famous for its Tea estates.t offers its products in the form of
string and tea bags, as well as in tins and wooden boxes.
3. Rubber Industry: The players of rubber industry Ansell Lanka (Pvt) Ltd, Associated
Motorways Ltd, Ceat-KelaniIntern.Tyres (Pvt) Ltd, Ceytra Ltd, Dipped Products Limited, D
Samson Industries Ltd, Elastomeric Enginering Co. Ltd, Hanwella Rubber Products Ltd,
Jafferjee Brothers Exports Ltd, Lalan Rubbers (Pvt) Ltd, Lancor Rubber Industries, Loadstar
(Pvt) Ltd, Microcells Ltd, Richard P. Exports Ltd, Samson International Ltd, Sinwa Holdings
Ltd, Textrip Ltd, Trelleborg Lanka (Pvt) Ltd etc

4. Tobacco industry: The players of tobacco industry are Orient Lanka Limited, Agio
Tobacco Processing Co (Pvt) Ltd, Sslanka, Arvegie (Pvt) Ltd, Ceylon Tobacco Company
Ltd, Thansher And Company, Vistart (Pvt) Ltd, Wins Management Pvt Ltd etc.

5. Telecommunication industry: There are many Tele communication companies in SriLanka that Mobitel (Pvt) Ltd, SLT Visioncom (Pvt) Ltd, SLT Publications (Pvt) Ltd, SLT
Hong Kong Limited, Sri Lanka Telecom Services (SLTS), SLT Manpower.

http://www.bplteas.com/news.htm
16

6. Petroleum Refinary: Lanka IOC PLC,IndianOil (Mauritius) Ltd., IOC Middle East
FZEChennai Petroleum Corporation Ltd., (CPCL)IndianOil - CREDA Biofuels Limited. etc
are the petroleum refinery in Sri-Lanka.

7. Banking Industry: There are many players in banking industry.

Savings Banks - National Saving Bank, MBSL saving Bank Sri-Lanka Saving Bank,
Merchant Bank
Local Banks: - Peoples Bank, Commercial Bank of Ceylon, Hatton National Bank,
Sampath BankNDb Bank, National Trust Bank Pan Asia Bank

Foreign Banks- HSBC, Standard Chartered Bank, Citibank, IOB, MCB, ICICI Bank

Commercial Banks
Savings Banks -National Savings Bank, MBSL Savings Bank, Sri Lanka Saving Bank
Merchant Banks -Sterling Merchant Investment, Merchant Bank of Sri Lanka, Seylan
Merchant Bank People's Merchant Bank.

8. Apparal Industry: There are many companies working under apparel industry those are
MAS Holdings, Jay Jay Mills Lanka (Pvt) Ltd, Brandix Lanka Limited , Hayleys PLC, ,
Hirdarmani Group, Jinadasa Holdings, , BAM , Shiran Garments,Sumithra Garments (Pvt)
Ltd etc.
Penetration in Rural & Urban Area:
There are approximately 16,405 manufacturing enterprises in urban area and 6,20,000
manufacturing enterprises in rural areas. Under Rural enterprises, it gives employment to 1.5
million workers i.e. 20% of labor force of country. However the data does not consider
informal firms operating in urban area but considers both formal and informal firms working
in rural areas. Thus, contrary to the opinion 59% of the businesses in case of rural area have a
place to carry out the businesses other than their home.
Incase of urban area 50% of the manufacturing activities are from textiles, Ready-made
garments, Food and Beverages, Industrial equipment and Rubber. Urban manufacturing firms

17

are export oriented where 93.5% of the firms are exporting 10% of sales in case of garment
industry, 75.4% incase of Rubber, 62.2% incase of food and beverages. More of the
Manufacturing activity is carried out in Colombo Metropolitan area, even though the
geographic distribution varies in different sector. Though Garment and industrial equipment
firms are limited to Colombo area, threequarters of food and beverages are carried outside
Colombo, so that they can be closer to supplier. However textile enterprises are found in both
colombo and in other urban centers.
Many of the Rural nonfarm enterprises are involved in either production with 41% , trading
with 38% and minimum share in service with 21%. Moreover approx. 10% of them are into
manufacturing and sale of processed agricultural goods. Non agricultural production includes
garments, nonmetallic mineral products, furniture and wood products. Many of the rural
trading establishments are involved in selling processed i.e. 65% and unprocessed
agricultural products i.e. 57%. However in case of service industry largest share is in reparing
service with 24% followed by personal service 17% and hotels with 14%.
However Nonfarm enterprises of rural area are found throughout the country. The highest
concentration is found in Western Province with more than 20%, and then in North Eastern
and South Eastern Province. Urban manufacturing enterprises employ roughly a median of
105 workers including 15 temporary workers. However 2.4 workers on average covering
family members are employed by rural enterprises. Half of the family members of rural
nonfarm enterprises employed the highest in trading enterprises with 60% and smallest in
production with 42%. With an average of three workers, production enterprises is considered
to be larger. As per survey there are 181 workers in the largest rural enterprise. There are
more than 5 workers in 6% of rural enterprises. Amongst different sectors the participation of
women is highest in textile sector. Almost a quarter of all enterprises are runned by women in
rural non farm sector.
In terms of employment growth in urban area, export oriented firms are the most dynamic
one. However under rural area small firms that have employees less than five are most stable
compared to larger firms that are shrinking or growing with market demand or fluctuations in
seasons. Thus since 90% of rural enterprises are not making any change in the number of
employees, there is little flux in employment in rural enterprises.
Compared to rural enterprises, urban enterprises are more older and stable because the
average age of urban manufacturing firms are 30 years whereas rural enterprises are upto 9
18

years or a bit more than that. Rubber, food and beverage sector are the oldest while garment
sector are the youngest, among various urban enterprises. Trading enterprises are expected to
be younger in rural areas since the start up capital requirement is less. Moreover more than
85% of rural enterprises have conducted their operation in same location, Majority of them
have stayed in the gramaniladharii.e. a community.
Compared to rural firms, urban firms are more capital intensive and productive. Under urban
manufacturing the per worker value added annually is almost 8 times than in ruarl
manufacturing. The labor costs is low in rural enterprises productivity is low and short lived
among nonfarm rural enterprises to earn agriculture income and supplement the family.
Industrial equipment and Rubber products are considered to be the most productive in urban
sector. Since textile and garment industries are labor intensive they lag far behind. Rural
firms productivity differs according to regions and sectors.Wesern and central province are
more productive, compared to North Eastern province. Service firms have the highest
productivity among various rural enterprises.

Inspite of difference in productivity in urban and rural areas, contribution of rural nonfarm
enterprises is significant to GDP. Rural enterprises to be registered and pay taxes are larger
and are there in stand alone establishment. Compared to production enterprises, trade and
service enterprises are more likely to be registered, because it operates as stand alone
business. Most of the firms has not registered because the process was expensive, time
consuming, or it was in order to avoid high tax. Further the cost of registering a business in
srilanka has been declining. The links between rural nonfarms enterprises and urban firms are
weak. From survey it was found that rural enterprises sell their products to multinationals,
parent companies or larger urban firms. Larger rural nonfarm enterprises having larger
production and trading are likely to have links with larger firms
Both urban manufacturing and the rural nonfarm sector are linked with each other for
agriculture. Export of processing of tea and coconut are big earners for srilanka. The rubber
industry was also prominent, but with the fall in world rubber prices, its value has been
declined. There is backward and forward links for production, agriculture provides inputs and
thereby demands chemicals and equipment produced by industry. Agriculture, urban
manufacturing and rural nonfarm activities are related with each other through labor and
capital markets and sales in all three rural nonfarm sectors increase during april and decrease
19

when house old income reduces when there is low agicultural labor required i.e. in the middle
of the slack season.
Distribution channel of different Industries:
1. Tea:
Sri-lanka has a largest business of a tea. They uses different type of distribution. They also
doing international business.
For tea sri-lanka generally uses one level and two level distribution channel.

Company

Company

Wholesaler

Wholesaler

Retailer

Retailer

Customer

This two types of distribution channel used by tea industry.

Dilmah is the largest tea business of Sri-Lanka. It has been entered into distribution tie up
with Dabur Foods. Dilmah target to make 15000 retail outlets this year.

20

2. Rubber:
Rubeer industry is one of the largest distributors in the country for Hardware, Fishing Gear
Outlets, and Furniture Outlets, covering over 6,000 dealers. Products include plastic water
tanks, PVC pipes fittings, rubber & plastic hoses, rubber mats, cushions, furniture, agri
pumps, CFL bulbs.
They use zero level distribution channel.

Rubber

Customer

Company

( company)

The company further secured the largest tyre distribution network with 1300 dealers who
have spread throughout Sri Lanka. Recently the company introduced the Altima Battery
range to the market.

21

3. Tourism Industry:
Tourism industry is service based industry. They directly services provided to the customers.
They also have a agents in different countries.
They use zero level and one level distribution channel.

Company

Company

Customer

Agent

22

Customer

4. Apparel Industry:
Apparel industry uses three level distribution channels. They have a agent. Agent is generally
who arrange executions.

Company

Agent

Customer

Wholesaler

23

Retailer

Customer

Overview of Different
Economic Sector

24

Contribution to GDP

The Gross Domestic Product (GDP) in Sri Lanka has expanded recently it has reached to
6.4 percent in the second quarter of year 2012 as compared to the same quarter of the
previous year.

The annual growth rate in Gross Domestic Product comprises of the increase in value of
the goods and services that are produced by an economy during the period of a one year.

The following data are available for the last four years contribution of GDP in different
sectors:

Year

Agriculture

Service

Industry

2008

32.7%

41.0%

26.3%

2009

12.8%

58.0%

29.2%

2010

12.0%

59.3%

28.6%

2011

13.0%

57.4%

29.6%

From the above table of contribution of different sector in GDP of Sri Lanka conclusion is
arrived which are listed below:
In all the year listed above it can be easily said that the contribution of service sector are more
compare to other sector of Agriculture and Industry. In the year 2008 it was 32.7%, in 2009
58%, in 2010 59.3% while in 2011 it was 57.4% so the growing and development of service
sector are good compare to other sector.
Sources
http://www.gfmag.com/gdp-data-country-reports/174-sri-lanka-gdp-countryreport.html#ixzz287PFotrkAttributionShareAlike
http://www.gfmag.com/subscribe.html

25

Growth Rate
Sri Lanka Central Banks expects that Sri Lankas GDP is likely to grow with the record
growth rate of 7.2 per cent in 2012, as compared to the earlier estimation of 8 per cent.
Besides this, recent policy measures expects in leading to a moderate aggregate demand
which will have a dampening effect on prices, thereby offsetting to some extent, and the
supply side pressures on prices as a result of the recent upward adjustments to administered
prices.
In the Monetary Policy Review released that Central Bank of Sri Lanka said its Repurchase
rate and the Reverse Repurchase rate would remain at 7.50 percent and 9.00 percent
respectively.
The central Bank has lowered the estimation for 2012 to 7.2 percent from an earlier
projection of 8 percent growth rate. The policy measures that are implemented by both the
government as well as by the Central Bank will impact the constant growth of the economy,
because of the higher energy costs, declining credit flows, and lower import.
The imports have increased considerably during the last year because of the expansion in the
domestic investment. However, the continuous performance of domestic supply has lowered
the adverse impact of rising commodity prices in the international markets which has helped
to keep the inflation rate constant over the past three years.
The Central Bank hopes that the new measures which are taken by the government will
encourage the industries as well as to the public for finding new avenues to reduce energy
consumption and reduce the expenditure on fuel imports to certain level.

26

Favorable & Unfavorable Factors

Agriculture Sector
Favorable factors

In Sri Lanka Agriculture mainly depends on rice production. So for that they
improved agriculture technology.

For the Improvement Sri Lanka Govt. Introduce Department of Agriculture Sri Lanka
(DOASL).

The Functions of the departments are research, extension or expansion, production of

seed and planting material, regulatory services, conservation of soil, registration of
pesticides and plant quarantine.

There are certain Agriculture Parks stated as A. Parks which are established by the
department for improving the production.

From the very beginning Sri Lanka has been an active partner in international or
global trade. So they are able to make international trade and from that they are able
to create wealth.

Unfavorable Factors

Weaknesses in strategy and policy for the improvement of agriculture sector.

Interventions in Heavy public sector regulatory in commodity.

Weakness in the delivery of services in rural areas.

Negative impact of civil conflict and tsunami.

Service Sector
Favorable factors

Sri Lanka increasingly becomes a service oriented economy thats why they
aggressively develop them by investing huge amount of investment.

Due to see area, Tourism services are very good in Sri Lanka.

From the past few years the measure portion almost 60% of GDP is covered by
service sector only.

27

The Commonwealth Secretariat is providing technical assistance to the Government

of Sri Lanka to help the country build up its capacity in the services sector.

They have also identified the potential competitive export capability in Sri Lanka for
service sector.

Sri Lankas IT industry has shown constant progress in the past decade this has led
the IT sector in becoming a vibrant sector in the country.

Unfavorable Factors

Every factor which relates the service sector, all are positive or we can say all are
favourable for the country.

Industry (Manufacturing) Sector

Favorable factors

The government's industrial policy includes encouraging investment in the industries

where srilanka is having advantage.

The Board of Investment (BOI) of srilanka is offering various incentives for

investment in five industry segments that comprises of, industrial and machinery
tools, rubber-based industries, light and heavy engineering sector, ceramics and
glassware, and electronics and components for electronic assembling.

This will increase the efficiency level of industrial sector in Sri Lanka.

Another key policy element or we can say favorable element is deregulation, in the
year 2001 a committee on deregulation was formed to study regulatory obstructions to
Sri Lanka's industrial development.

A positive development was the restoration of a reliable power supply in May the year
2002 with the end of drought.

28

Unfavorable Factors

Government of Sri Lanka make import liberalization policy; because of that policy the
small scale industries are affected.

It increases unsatisfied level of small sectors industries.

Liberalizations policy has removed the regulatory barriers. So that in Sri Lanka the
large scale industry have not much barriers but for small industries are affected.

Strongest and Weakest Segments

The industry sector plays prominent role for Srilankan economy. In the year 2007, industry
sector has contributed Rs. 635,199 Million that is 28.5% of the total production of the country
(GDP), while agriculture sector contributed 11.9% and service sector contributed 59.6%
respectively to the total production of the country.
According to the data of 2011 the estimated gross domestic product of Srilanka would be
about $ 115.1 billion. Out of the total production agriculture sector comprises about 13% of
the GDP while service sector contributed 57.4% of the total GDP of the country and industry
sector contributed 29.6% of the total gross domestic product of the country. As far as
agriculture sector is concerned products such as, vegetables, fruit, tea, rubber, coconuts, rice,
sugarcane, grains, pulses, oilseed, spices milk, eggs, fish etc. are included while industry
sector constitute of processing of rubber, tea, banking, tourism, shipping, clothing, textiles,
cement, petroleum refining, information technology services, construction coconuts, tobacco
and other agricultural commodities, telecommunications, insurance, etc.
Considering the data given we can say that the service sector plays an important role in the Sri
Lankan economy so it can be considered as the strongest segment of the economy besides this
agriculture sector is the least contributing sector in the total gross domestic product of srilanka
because

of

the

constantly

reducing

share

of

Sources
http://www.theodora.com/wfbcurrent/sri_lanka/sri_lanka_economy.html
29

its

contribution.

Contrast and Comparisons

From the above given information it can be analyzed that the strongest segment of srilanka is
SERVICE SECTOR. This sector contributes almost 60% of GDP in past few years. They
have identified various competitive potential capabilities to strengthen the economy. The
weakest segment of srilanka is AGRICULTURE SECTOR. In past three years this sector has
contributed only 12% in the GDP of srilanka. There are so many regulations which are the
main barriers for this sector. There is no proper strategy formulation and execution for the
improvement of this sector. Due to weak delivery services and possible tsunami destructions
this sector becomes the weakest segment.

30

Overview of business & trade at

international level

31

Prohibition Imports and exports

(1) There are many strict laws for the import and export in the Sri Lanka. And according to
the provision and of the sub section are strictly been followed in the constitution and no
person is allowed to import or export except the authorized good and if the prohibited goods
are to be imported licence is issued by the government and then only they are allowed to
import or export the goods and government is strict to the rules of the controller

(2) Importation or exportation from the country is not at all possible without the licence and
if the licence is been there with the person than it will be allowed act
shallbedeemednottobeacontravention of the provisions of subsection, ifsuch importation
orexportationwas authorizedbylicenceissuedanderanylawforthetimein force.

(3) Only Sri Lankan government is authorized and responsible for the changes in the law and
no other authority is able to challenge the authority and is only way to do import or export in
Sri Lanka.

Prohibition of export of goods to a defaulter defined in the defaulters list:

Once any person name is has been listed in the list of defaulters he is not been allowed to
export from Sri Lanka.
Prohibition of export to be defaulters to be condition of the licence:
Any person is not allowed to export the goods to the person who is been listed in the
defaulter list and it is been prohibited by the law.

Prohibition or regulation of certain imports and exports:

a) Import from the specific countries listed in the law is not been allowed.

b) Only government can import goods from this country which is been registered in the
list of the government other than that no person or the corporate person or company
is allowed to do so. And if it has been done than it may be registered in the law.

32

Imports Procedure
Sri Lanka had been firstly an agricultural and self-dependent in the ancient past. Due to past,
political and economic changes it has ceased to be a self-dependent nation. Recently it is
mainly dependent on trade. Imports Division of Sri Lanka Customs Department plays a
unique role in this regard in the economy.
Imports division consists of 3 separate units 1. Long Room 2. "D" branch 3. Postal
Appraising unit according to the functions.
Import tariff- Sri Lanka
In Srilanka import tariffs are on the cost, insurance and freight value. Some items like
footwear are per unit duty if the resulting rate is greater than the ad valorem
rate. Imported inputs for the export industries are not for the import duty, for example all
imports of textile, yarn, and capital goods required in srilanka for the garment export
industry are release import duty.

Tariffs for Textiles, Apparel, Footwear and Travel Goods

Chapter

Traffic Range rate in %

Wool

5105-5110ch

Cotton

5204-5207ch

Silk

5003-5006ch

Man-made fiber

5401-5406ch

Other vegetable fiber

5306-5308ch

wool

5111-5113ch

Silk

5007ch

cotton

5208-5212ch

Man-mad fiber

5407-5408ch

0-15

Other vegetable fiber

5309-5311ch

Yarn

Woven Fabric

33

Non-woven fabrics

5603ch

Industry Fabric

59ch

0-15

Apparel fabrics

61-62ch

0-15

Home Furnishings

63ch

15-30

carpet

57ch

15

Footwear

64ch

0-30

Travel Goods

4202ch

30

Additional srilanka Import Taxes and Fees-

Value added tax (VAT) of 12 % import price plus profit margin of 10 %. A VAT
of 20 % is charged on luxury goods in srilanka.

Export Development Board (EDB) Levy, ranging from 1 to 35 % is applied

customs values consider in rupees plus a 10% margins put on a range of imports
find as nonessential, like shoes, bags, textile products. Apparel is subject to a levy
of 30% or Rs 75per unit whichever levy is more. A charge of 50 Rs. per kilogram
is assessed imported textiles not use in apparel export industry.

Ports and Airports Development Levy (PAL) of 5% is applied on all dutiable

imports. Manufactured products are not subject to Ports and Airports
Development Levy.

Nation Building Levy of 2 % in Srilanka.

34

Export Procedure
To facilitate the Customs Export Process has been a great extent in past. Rules and
regulations are relaxed; schemes are implemented with collaboration with other state
agencies as a part of state endeavor for development of Sri Lanka as a country with an export
oriented economy. Sri Lanka Customs pays a good saw in all export related things to safe
Srilanka wealth such as archeological treasure, fauna and flora by implementing related laws.
Export Subsidies
95% of the worlds costumer live outside the United State by 2030, so many people
considered as a middle class people will triple to 1.2 billion. Global economy also growing to
$72 trillion. Exporting is to reach the international market and these consumers to:
It grow your bottom line
It level your business cycle
It use production capabilities fully
It strengthen your domestic market
It increase competitiveness across all markets

By entering into the new markets, opportunity to learn how to compete successfully, in
making money. In srilanka, 60% of small scale companies that engage in exporting.
Challenging exporting provides firms with new opportunities for growth.

35

Sri Lanka - Foreign Direct Investment

Foreign direct investment, net outflows (% of GDP)
Sri Lanka Foreign investment, net outflows (GDP in %) was 0.08 in 2010. Its highest value
over the past 20 years and it was 0.15 in 2007; however its lowest value was 0.01 in 1986.
Definition: FDI is net inflows investment to acquire the last management interest (10%) in
the enterprise operating as in an economy other than the investors. These are the sum of the
equity capital, short-term funds, reinvested of earnings and other long-term capital shown in
the balance of payments. Here series show that net outflows of investments from reporting
economy for the rest of world and as divided by GDP.
Source: International monetary fund, Global development finance, World Bank, International
financial statistics and balance of payment database, OECD GDP estimates.

Year

199

199

199

199

200

200

200

200

200

200

200

200

201

Valu
e

0.05 0.02 0.07 0.07 0.07 0.14 0.03 0.15 0.1

0.16 0.14 0.04 0.08

Foreign direct investment, net (current US$)

The recent value of foreign direct investments (current US$) in Srilanka was $
435,510,000.00 as in 2010. Over the past years, the value has fluctuated between $
690,489,000.00 in 2008 and $ 1,217,566.00 in 1977.
Here table shows total net FDI in reporting economies from foreign sourced less than net FDI
bye the economy to rest of the world. Data are in U.S. dollars.

year

200

200

Value(cr
)

1.72

1.71

2002

2003

2004

2005

2006

2007

2008

2009

2010

18.5

20.1

22.7

23.4

45.0

54.8

69.0

38.4

43.5

Source: Balance of Payment statistics year book, data files and International Monetary funds.

36

Foreign direct investment, net inflows (current US$)

The recent value of foreign direct investment is net inflows (current US$) in Sri Lanka was $
478,211,000.00 as in 2010. The past years, the value has been fluctuated between $
752,100.000.00 in 2008 & $ 1,217,566.00 in 1977.
Definition: FDI is net inflows of investment that acquire last interest in or management
control over the enterprise operating in an economy other than the investor. It is the sum of
reinvestment earnings, equity capital, other long-term funds, and short-term funds, as shows
in the balance of payment. Data are in U.S. dollars.
Source: balance of payments database, Supplement of data from United Nations Conference
on trade & development, International Monetary fund and official national sources.
year

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Value(cr.

17.2

17.1

19.6

22.8

23.2

27.2

47.9

60.3

75.2

40.4

47.8

Foreign direct investment, net inflows (GDP in %)

Foreign direct investment, net inflows (GDP in %) in Sri Lanka was 0.97 in 2010. Its higher
value of over past years was 2.85 in 1997, however its lower value was 0.03 in 1977
Definition: FDI are the net inflows of investments to acquire a lasting management interest in
the enterprise operating as in an economy other than the investor.

It is the sum of

reinvestment of earnings equity fund, long-term as well as short- term fund as shown in the
balance of payment.
Source: World Bank, Global development finance, International financial statistics and
balance payment database, International Monetary fund and OECD GDP estimates.
Year

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Value

1.09

1.14

1.20

1.13

1.11

1.69

1.85

1.85

0.96

0.97

37

Telecommunication Systems
Sri Lanka telecom is one of valuable business of country which has yearly revenue of 50
million. Govt. of Sri Lanka and global telecommunication holding of Netherland was main
stockholder with share of 49.5% and 44.98% respectively in 2011. It was public firm which
has 51% share to state, but later 1995 private firms are also there. TASL (telecommunication
authority of Sri Lanka) made it liberalized by permitting a private operator.
The STL Public Switched Packet Data Network (PSPDN) creates custom for ISO standard
X.25 Packet Switching technology, which cares worldwide standardized communication
protocols, permits computers and to other data devices for connect with each other. Data PAC
PSPDN was related to gateway packet switch service of India to give worldwide connection.
Thirty nations and hundred public networks were available by GPSS India.
Sri Lankas mobile handset facility has stared with growth. Due to active and competent
option of problematic fixe line services, mobile handsets develop well known and important
facility. Country mobile market was increasing at yearly proportion of 40% in 2009. But in
2010 progress was only 20% to 30%. There were four players like axiata, mobitel, etisalat
and Hutchison, but in 2009 Bharati Airtel enters strongly and it was at 4th.
Internet service was stared in February 1996 by SLT but private firm are receive license
recently. Offered of online internet access for commercial was lanka internet service in 1995.
Infolab was stared to give internet facility which is internet club user can play on hourly
based. In country of 20 million populations only 220000 broadband users was there in 2011.
Sri Lankas internet service was underdeveloped and broadband facility was low but its
changing. The National Broadband Consultative Committee (NBCC) was working for
development.
In 2011 countrys market for mobile comes to 18 million with 87% penetration. Countrys
market for fixed line was only 18%. Development of fixe line was improved with help of
wide use of CDMA base WLL expertise which include three stations for user in 2011. In
2010 fixed line users ware 3.58 means 4% in 2010 and in 2011 it was 3.7 means 3% which
means that it declined by 1%.
Total users for internet facility were 3 lakhs in 2010 and 4 lakhs in 2011. Total internet user
was 1.4% in 2010, yearly developments were 20% and in 2011 users were 1.9%, and yearly
development was 33%.
38

Total users of mobile facility were17.3 million in 2010 with growth rate of 23% and 19.8
million in 2011 with 14%. Growth, so we can say that it was a very large decline. Total
mobile population was 82% in 2010 and in 2011 it was 92%.
For growth of Hatton national bank, they done contract with SLT. For launching peoples
SMS banking many banks like bank of Ceylon, Commercial Bank of Ceylon PLC, HSBC
Bank,
Nation Trust Bank, Seylan bank, Standard Chartered Bank, Sampath Bank, Citibank N.A.,
Deutsch Bank and NDB Bank join with SLT.

39

Major imports and export of Srilankan with other country (till India)
Major Import of srilanka with other country -The data given below is provides the total
imports in srilanka on Free on board or on Cost, insurance and freight basis in US dollar.
These figures are not calculated on Purchasing power parity but its calculated on an
Exchange rate basis.
-

This data are taken from CIA World Fact book (January 1, 2012)

The following graph shows the total share of various import partners of srilanka in US
dollar.
Rank

Country

Imports (Billion $)

United States

2,236

China

1,743

Germany

1,198

Japan

808.4

France

688.5

U.K

639.5

Italy

556.4

Korea, South

524.4

Netherlands

493.1

10

Hong Kong

482.6

11

India

461.4

12

Canada

461

13

Singapore

366.3

14

Spain

363.1

15

Belgium

355.1

16

Mexico

350.8

17

Russia

322.5

18

Switzerland

294.1

19

Taiwan

279.4

20

Australia

243.4

40

2,500
2,000
1,500
1,000
500
0

Major export of srilanka with other country - The data given below is provides the total
exports in srilanka on Free on board basis. These figures are not calculated on Purchasing
power parity but its calculated on an Exchange rate basis.
-

This data are taken from CIA World Fact book (January 1, 2012)

The following graph shows the total share of various export partners of srilanka in US
dollar.
Rank

Country

Exports(Billion$)

China

1,904

United states 1,497

Germany

1,408

Japan

788

France

587.1

Korea

556.5

Netherlands

551.8

Italy

523.9

Russia

520.9

10

U.K

479.7

41

Present Trade Relations & Business Volume of

Different Products With India/Gujarat

42

Relationship between India and Sri Lanka

v Sri Lanka is Indias nearby neighbor. The connection within two countries is greater than
2,500 years old.

v The relationships between two countries have developed and diversify with the route of
time till the todays date. The common culture of both the country and civilization
heritage of the both countries have extensive communication of their citizen provide the
establishment to build a multi faced partnership. In recent years, with the help of political
issues the relationship between both the country, co-operation in the field of development,
education culture, etc. as well as a wide understanding on most important issues of
worldwide interest.

v The Government of India put make a healthy programmed of help to help out these IDPs
comes again to normal life as quickly as possible. In June 2009, the Prime minister Dr.
Manmohan Singh announced that a grant of INR 5 billion for therapy in Sri Lanka. Then
after India provides 2, 50,000 reliefs pack for IDP. After that also establish emergency
medical unit in the IDP. Which was treated over 50,000 IDPs and carried over the 3000
surgeries from the March to September 2009.

v India also again and again advocated they require for IDPs to be resettled to their original
habitations as early as promising. For that giving help India provides protection help by
supplying 10,400 tones of galvanized sheets between August 2009 and May 2011 for
constructing short-term housing for IDPs. The Government of India also supplied
400,000 bags of cement to help IDPs. Since the need of de-mining was a major limit on
the speed of movement, the Government of India fully financed seven Indian de-mining
teams, engaged in various sectors in northern Sri Lanka to help accelerate movement.

v From last few years witness are increased trend of Sri Lankan savings into India. major
examples include Ceylon Biscuits (Munchee brand), Car sons Cumber batch (Carlsberg),
Brandix, MAS holdings, John Keels, Hayleys, and Aitkin Spence (Hotels), relating from
other investments in the freight services and logistics department.

43

v In todays scenario are the India and the Sri Lankan relationship is strong and balanced
for a quantum jump by construction on the rich contribution of historical linkages and
strong economic and growth partnerships that have been bogus in recent years.

44

Bilateral Relations with India and Sri Lanka

v India is Sri Lankas closest neighbor and the relationship between them is of greater than
2500 years. In past years, the relationship defines that there should be close contacts at
the high political level, investment, education, culture or a broad understanding on the
issues of international interest.

v The past three-decade defines there should be clash between Sri Lankan forces & the
LTTE came an ends in May 2009. Throughout the clash, India supported to the Sri Lanka
to take action beside the terrorists. Just then, it conveyed at the highest point its profound
fear at the troubles of the mostly Tamil civilians, emphasizing that their rights & welfare
should not get trapped in fighting against the LTTE.

v Sri Lanka is single of the main recipients of growth credit given by the Government of
India.

India involved in projects for renovation of Kankesanthurai Harbour,

construction of Cultural centre at Jaffna, Palaly Airport, interconnection of electricity

grids among India and Sri Lanka.
v A core area of cooperation between India & Sri Lanka is education. Both countries
decided to set up an India Sri Lanka knowledge Initiative through the making of small
visit by the President Rajapaksa to India in June 2010.

v India is one of the huge source markets for Sri Lankan tourism and Tourism also makes a
very vital link between India & Sri Lanka. In 2010, out of the total 6,54,976 tourists,
1,26,882 were from India constituting as regards 20%. In the time of January to
November in 2011, the tourist sector improved to 7,58,458 from 5,70,349 in the
corresponding period of 2010 showing boost of about 33%.

v The India-Sri Lanka Foundation set up in December 1998 as an intergovernmental

initiative also promotes unbreakable understanding among the peoples of the two
countries, including throughout improvement of technical, educational, scientific, and
cultural cooperation. The Foundation focuses particularly on the sponsorship of civil
society cooperation & enhancing contact among the younger generations of the two
countries.
45