Trade Policy - Permanent Mission of Sri Lanka to the UN Geneva Switzerland

The Governments of Sri Lanka and Uzbekistan have officially signed the Protocol of Agreement on the Republic of Uzbekistan's accession to the World Trade Organization (WTO). The signing ceremony took place at the WTO Secretariat in Geneva on 12th September 2024, marking a significant step in both countries' dedication to enhancing their participation in the global trading system.

Uzbekistan’s journey towards WTO membership began in 1995 with the establishment of a Working Party, of which Sri Lanka is a member. After years of discussions, the two nations successfully concluded negotiations in the first half of 2024, paving the way for another step forward for Uzbekistan’s formal inclusion in the global trade body.

In 2023, Sri Lanka exported approximately USD 6 million worth of goods to Uzbekistan, with around 75% of this comprising tea, a critical export for Sri Lanka. During the negotiations, Sri Lanka’s Department of Commerce, the Sri Lanka Tea Board (SLTB), and tea industry stakeholders collaborated with the WTO Mission in Geneva to protect the country’s market interests in Uzbekistan, ensuring that Sri Lankan exports, particularly tea, continue to thrive in this emerging market.

Representing Sri Lanka at the signing was H.E. R.G.S. Wijesekara, Ambassador and Permanent Representative to the WTO, while Uzbekistan’s Chief Negotiator and Special Representative of the President to the WTO, Mr. Azizbek Urunov, signed on behalf of Uzbekistan.

FOREIGN TRADE REGIME OF SRI LANKA

Multilateral Trade

Sri Lanka, a founder member of the GATT/WTO, continues to be a strong promoter of free trade. Its foreign trade regime is characterised by a combination of the GATT/WTO disciplines and a series of market-oriented reforms, which were introduced unilaterally by several successive governments since 1977. The liberal trade policies strive at further integrating Sri Lanka into the global economy, while holding in balance the domestic stakeholder interests.

Imports are primarily regulated through border tariffs with hardly any quantitative restrictions. Sri Lanka currently maintains a simplified four-band tariff structure, where over 50% of the tariff lines enjoy zero (MFN) duty.

Classification	Customs Duty (%)	No. of Tariff Lines
Essential inputs, not manufactured locally	0.0	3,376
Raw materials & semi raw materials	7.5	184
Intermediate goods	15.0	1,605
End-user products	25.0	1,412

However, it is pertinent to mention that a few product categories such as alcohol, cigarettes, perfumes and automobiles are subject to higher tariffs.

Preferential Trade

Sri Lanka is a signatory to the following free / preferential trade agreements, which grant tariff concessions to a wide range of products in a number of key markets.

- Indo-Sri Lanka Free Trade Agreement
- Pakistan-Sri Lanka Free Trade Agreement
- South-Asian Free Trade Area (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka)
- Asia-Pacific Trade Agreement (Bangladesh, China, India, South Korea, Laos and Sri Lanka)
- Global System of Trade Preferences – GSTP (Over 40 countries)

Sri Lanka also enjoys preferential market access under the Generalized System of Preferences (GSP) schemes of the following countries.

Australia    Canada            European Union
Japan       New Zealand   Norway (GSP+)
Russia       Switzerland    United States

An ideal destination for trade and investment

The 2013 “Ease of Doing Business” Survey by the World Bank Group has ranked Sri Lanka as the easiest country to do business within the entire South Asian region. A host of factors, including peaceful and business friendly environment, supportive government policies, educated and easily adaptable workforce, strategic location and connectivity, preferential access to key markets, fast improving social infrastructure and quality of life have made Sri Lanka an ideal destination for both trade and investment.

Useful Links

Department of Commerce
Department of Sri Lanka Customs
Board of Investment of Sri Lanka
Department of Registrar of Companies
National Intellectual Property Office
Sri Lanka Tourism Promotion Bureau
Sri Lanka Export Development Board