Trade Adjustment Program

With the Cabinet approval of a New Trade Policy (NTP) in August 2017, the Government of Sri Lanka commited to stmulatng economic growth and creatng jobs by fostering an environment that was conducive for firms to export and compete for domestc markets. As part of this NTP, the country has made a concerted effort to push for greater trade liberalizaton, which had been long overdue. Sri Lanka’s average border taxes are now around three tmes higher than our competitor countries in Asia, thus making investment atraction challenging, holding back Sri Lankan export enterprises from partcipating in global supply chains, and also lowering consumer welfare. As Sri Lanka embarks on trade liberalization, either through unilateral measures like the cut of para-tariffs, or bilateral tariff reduction through Free Trade Agreements, there is a need to carefully manage the potential negatve impacts and improve the competitveness of firms and safeguard the welfare of workers. In order to do this, Government envisaged introducing ‘Trade Adjustment Program’ (TAP). The primary objectve of the ‘Trade Adjustment Program’ is to smooth the transi􀆟on of firms and workers to the new market condition created by tradeliberalization.

Several labor-intensive sectors face a high level of protection, therefore increased international competition following from trade liberalization can impact firms and jobs. A ‘Trade Adjustment Program’ can help to minimize the adjustment costs incurred by affected firms and workers, and to alleviate the resistance from the groups that are adversely affected by the trade reforms that will be of overall benefit to the country.

The Ministry of Development Strategies and International Trade embarked on a 6 month long exercise to develop a comprehensive design of a ‘Trade Adjustment Program’. Drafts of implementation framework of a ‘Trade Adjustment Programme’ for Sri Lanka were discussed at five stakeholder consultations with industry associations/chambers and relevant public-sector institutions. The draft TAP was published online for open public comments. The final version will be developed taking the comments shared into account.

Further, the draft implementation framework of the TAP was submitted to the Cabinet and Cabinet has directed Ministry to take appropriate action to formulate the proposed TAP, giving due consideration to the matters heighted in the observations of H.E. the President and Hon. Minister of Finance. Accordingly, Ministry has taken action to incorporate comments made by the Cabinet as well as chambers, industry associations and other organizations.

In terms of the observation made by the Hon. Minister of Finance, it is needed to develop a workable action plan with time targets for the Trade and Productivity Commission (TPC) to implement their recommendations. The TPC to be the independent body that analyses TAP alongside the trade liberalization, that examines qualitative and quantitative evidence, investigates and responds to industry requests on tariff phase out, monitors the recommendations from the Industry Competitiveness Councils (ICCs) that are established to solve productivity constraints of affected sectors, and recommends to the Ministry of Finance & Mass Media for action. The TPC will consist of independent Commissioners supported by a secretariat of qualified professionals.

Accordingly, Hon. Minister of Development Strategies and International Trade has submitted nominations to Hon. Minister of Finance & Mass Media to establish the TPC, to expedite the process of implementing the TAP to complement the economic liberalization programme.


National Export Strategy (NES)

The National Export Strategy (NES), a flagship development project, spearheaded by the Ministry of Development Strategies & International Trade and the Sri Lanka Export Development Board (EDB) together with the public private partnership, has started implementation after obtaining the Cabinet approval and the launch with all the stakeholders of NES. Sri Lanka now has the opportunity to catch up with fast-growing Asian exporting countries.

The NES is a comprehensive and carefully structured five-year strategy aimed at increasing exports and generating enhanced revenue for Sri Lanka’s exporters including SMEs. The implementation of this endeavor will witness the increasing of Sri Lanka’s export revenue to USD$ 28 Billion by 2022.

The National Export Strategy is well aligned with, complements and operationalizes other national initiatives such as Enterprise Sri Lanka and Vision 2025.

The NES priority sectors have been selected to ensure a balanced export expansion from visionary, emerging and mature sectors which provide a good mix of industries with different growth trends, yet ensures the NES remains focused to achieve the key objective of export diversification during its 05-year implementation period.

The NES will improve the business environment for all Sri Lankan enterprises. While the NES provides the conditions to enable diversification by strengthening emerging sectors, all export industries of Sri Lanka will benefit from the increased performance of key Trade Support Functions.

These include;

  • Logistics
  • National Quality Infrastructure
  • Innovation and Entrepreneurship
  • Trade Information & Promotion

The NES aims to empower the emergence of new champions while supporting growth of traditional export industries. Major systemic issues hindering the rapid expansion of Sri Lanka’s exports will be corrected to favor growth of higher-technology and knowledge intensive exports, which are less vulnerable to cost shifts.

The Advisory Committees, established by the EDB have already commenced the implementation while the NES Management Unit which was established under the Ministry of Development Strategies and International Trade leads the coordination, follow up and monitoring of the NES.

The National Export Strategy is reinvigorating the trading environment and maximizing its potential to usher in a period of sustained growth, aimed at increasing livelihoods for millions of Sri Lankans. The NES is navigating Sri Lanka to its rightful place in the Indian Ocean, as a sophisticated, innovative & dynamic trade hub serving Asia and beyond.

Click here to visit National Export Strategy Web Page

Innovation and Entrepreneurship Strategy of Sri Lanka 2018-2022


Building a Prosperous Sri Lanka together: A resilient and innovative economy with export competitiveness; and an entrepreneurial society with better jobs.


To support the export competitiveness of Small and Medium Enterprises; promote the growth of startups; and align the public R&D sector with private sector needs.

As per the directions given by the Cabinet of Ministers on 11.07.2017, to develop the 'Innovation and Entrepreneurship Strategy for Sri Lanka (2018-2022)', the Ministry of Development Strategies & International Trade together with the Ministry of Science Technology Research, Skills Development & Vocational Training and Kandyan Heritage, the Ministry of Industry and Commerce, and Public and Private sector stakeholders, formulated the National Innovation and Entrepreneurship Strategy for Sri Lanka (I&E Strategy), with technical assistance from the World Bank Group. 

The I&E Strategy document was developed with wide public and private sector consultation over the past year and guided by a Working Group (comprising senior public officials and private sector leaders) as appointed by the Cabinet of Ministers.

Click here to download Innovation and Entrepreneurship Strategy for Sri Lanka (2018-2022)

Development of Sri Lanka's Digital Economy


The three-part framework includes,

  • Digitalization of priority sectors in the economy (demand)
  • Accelerating growth and development of digital sectors (supply); and
  • Building a robust enabling infrastructure (critical enablers)


Developing the local ICT/digital sectors, and creating a robust enabling environment, could add 2 - 3 % to Sri Lanka's GDP by 2025, representing LKR 660 - 980 Billon in accumulated economic output.

Digitally Enabled Free Trade Zone and "Logistic Villages":

Is expected to create an economic value of LKR 417 Billon through 2025, and generate LKR 311 Billon in exports, as well as create about 180,000 jobs. Expanding Sri Lanka’s Digital Economy and empowering everyone to reap its benefits is in the forefront of Government’s vision. Thereby, as per the direction of the Cabinet of Ministers the Ministry of Telecommunication & Digital Infrastructure and Ministry of Development Strategies & International Trade has initiated "Development of Sri Lanka's Digital Economy" with the assistance of McKinsey & Company.

In consultation with the above two Ministries and other relevant stakeholder organizations, McKinsey & Company has drafted the Digital Economy Strategy document. The strategy primarily focused on three (03) priority sectors: Manufacturing; Agriculture; and Tourism. The Digital Economy Strategy is an implementation-based approach with 3 flagship programs for each of the above priority sectors and 10 priority projects, targeting digital sectors and enabling infrastructure to be completed within 3-years.

A digitally enabled free trade zone empowered by new technologies and augmented by "Logistic Villages" established across country could link manufacturers of all sizes to global markets, delivering rapid value. The Ministry of Development Strategies & International Trade and the Ministry of Industry & Commerce will form the Steering Committee to take the ownership of implementing this program. The high-level cost for this initiative is estimated as LKR 3.5 Billon of capital expenditure for 3 years and LKR 1.2 Billion of operational expenditure for 7 years.

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