Category: Daily Financial Times

The government is working to position Sri Lanka as the world’s sapphire hub, announced Minister of Industry and Entrepreneurship Development Sunil Handunnetti at the third International Research Conference of the Gem and Jewellery Research and Training Institute (GJRTI) held on Friday (10) at the Colombo Foundation Institute.

Lanka Ventures PLC and LVL Energy Fund PLC have appointed Private Equity veteran Nissanka Weerasekera to their Boards as an Independent Non-Executive Director.

Weerasekera served as the Regional Managing Partner for Central and South Asia of Aureos Capital, a leading international Private Equity (PE) fund manager focusing on small and mid-cap enterprises in emerging markets worldwide from 2003 until the acquisition of Aureos Capital by the Abraaj Group in 2012.

He also functioned as the Group Operations Director of Aureos Capital while serving on the Board of Directors of the parent company of Aureos in the United Kingdom. After the acquisition of Aureos, he served as the Managing Director for Sri Lanka and Bangladesh of the Abraaj Group until his retirement in 2017.

Weerasekera started his PE career in the mid-1990s as the CEO of the pioneer Sri Lankan Venture Capital (VC) firm PVIC and subsequently as the Managing Director of Nextventures, a VC firm spun-off from PVIC.

He has served as the Nominee Director of numerous investee companies of the aforementioned PE and VC firms including among others, MillenniumIT, Interblocks, ConceptNursery, TextCentric, e-Channelling, Richlife Dairies, Dutch Lanka Trailers, Asiri Central Hospital, and Apollo Hospital Dhaka.

In addition, he has served as an Independent Non-Executive Director of several public listed companies in Sri Lanka including among others, Dipped Products PLC, John Keells Hotels PLC, Sunshine Holdings PLC and Watawala Plantations PLC.

He currently serves as an Independent Non-Executive Director of ACL Cables PLC and TAL Lanka Hotels PLC. He is also a Director of The Children’s Heart Project of Sri Lanka. He is a past-President of the Venture Capital Association of Sri Lanka, a past-Editor of the Sri Lanka Association of Economists and a past-Trustee of the National Trust of Sri Lanka.

He is a Fellow Member of the Chartered Institute of Management Accountants (FCMA), has an MA in economics from the University of Colombo and a BSc (Hons) in physics from the University of Peradeniya.

In my July 2025 article, ‘The IMF is a bandage, not a cure: Moving towards lasting solutions’ (https://www.ft.lk/columns/IMF-is-a-bandage-not-a-cure-Moving-towards-lasting-solutions/4-779057), I concluded that President Anura Kumara Disanayake’s bold decision not to seek another IMF bailout marks a turning point in Sri Lanka’s economic history. It signals the end of a dependency cycle and the beginning of a national test – whether we can sustain growth without external lifelines. The message is clear: Sri Lanka must now stand on its own feet.

Yet, almost a year later, one truth remains inescapable – the problem is not merely financial; it is structural. The IMF can stabilise a collapsing economy, but it cannot reform a dysfunctional one. The real battle for prosperity must be fought within our borders – by removing the domestic barriers that have suffocated enterprise, discouraged innovation, and driven investors elsewhere.

For decades, Sri Lanka has looked outward for solutions – blaming shifting global conditions, rising US tariffs, or foreign currency shortages – while ignoring the chronic inefficiencies within. The reality is uncomfortable: the world is not keeping investors away from Sri Lanka; we are.

Foreign Direct Investment (FDI) is not just a flow of capital; it is a vote of confidence in a nation’s governance, stability, and direction. Countries such as Vietnam and Malaysia have transformed their economies by creating an investor-friendly environment – while Sri Lanka, with all its potential, remains trapped in a web of bureaucratic red tape, policy inconsistency, and political interference.

Suppose we are serious about achieving sustainable economic growth and long-term independence from external bailouts. In that case, we must confront six persistent structural barriers that have kept Sri Lanka unattractive to global investors:

1.High tariffs

2.Non-tariff barriers

3.Customs inefficiency

4.Unpredictable taxation

5.Rigid labour regulations, and

6.An over-politicised bureaucracy

These are not abstract policy flaws – they are the daily obstacles that deter investment, distort markets, and drain the country’s potential. Unless these bottlenecks are systematically dismantled, no reform, however ambitious, can lead to lasting prosperity. The time has come to face these barriers with the same determination President Disanayake has shown in rejecting IMF dependency – because without FDI, there can be no absolute economic sovereignty.

1. High tariffs: How protectionism weakens competitiveness

High tariffs are often defended as tools to protect domestic industries and generate government revenue. Yet in Sri Lanka’s case, they have become one of the most damaging barriers to attracting Foreign Direct Investment (FDI). Investors seek markets where trade is predictable, transparent, and competitive – not insulated by excessive import duties that distort pricing and restrict access to essential inputs. When tariffs remain high, they effectively act as a tax on productivity, discouraging manufacturers who rely on imported machinery, components, or raw materials.

This protectionist mindset has isolated Sri Lanka from the global supply chain at a time when regional competitors – particularly Vietnam, Thailand, and Malaysia – have done the opposite. They have lowered tariffs, embraced free-trade frameworks, and integrated seamlessly into multinational production networks. As a result, while these nations attract billions in FDI annually, Sri Lanka continues to be perceived as a high-cost, low-efficiency destination.

Moreover, high tariffs create an uneven playing field that rewards inefficiency and penalises innovation. Domestic producers shielded from competition have little incentive to upgrade technology or improve quality. The result is a cycle of mediocrity – industries that survive not because they are competitive, but because they are protected. For foreign investors, this sends the wrong signal: it suggests that policy favours protection over productivity and politics over performance.

Reducing tariffs is therefore not merely a fiscal decision – it is a strategic reform essential to re-integrate Sri Lanka into the global economy. A rationalised, transparent tariff structure would lower production costs, encourage technology transfer, and stimulate export-led growth. More importantly, it would signal to investors that Sri Lanka is finally ready to compete – not hide – in the global marketplace.

Demonstrating commitment to a legacy of implementing productivity concepts in operational processes, Vidullanka PLC shined in the small category at the Taiki Akimoto 5S Awards, sweeping the main prizes as well as a merit for CSR.

The event, organised by the Japan Sri Lanka Technical and Cultural Association (JASTECA), was held on 11 October at the Galadari Hotel, recognising organisations that exemplify Japanese productivity and the 5S methodology.

Five power plants represented Vidullanka’s entry at the awards. Kothmale Mini Hydro Power Plant earned the coveted Gold Award in the small category, while Batatota Mini Hydro Power Plant claimed the Silver Award, and Wembiyagoda Mini Hydro Power Plant received the Bronze Award. Additionally, Madugeta Mini Hydro Power Plant was honored with a Merit Award, further strengthening Vidullanka’s winning streak in 5S excellence. Apart from this category, the Rideepa Mini Hydro Power Plant received a Merit for CSR and Sustainability for the WeManage river cleaning project.

Vidullanka PLC began its journey to initiate and incorporate 5S practices into its business operations over two decades ago. Through discipline, teamwork and innovation, the company has evolved in its productivity approaches and practices, nurturing a culture of excellence among its employees. Its recorded history of accolades received from JASTECA over the years is a testament to Vidullanka’s commitment to structured improvement and sustainable operations.

Chief Executive Officer Riyaz Sangani said, ‘These awards affirm that embedding the 5S philosophy across our operations has strengthened our ability to deliver reliable, sustainable energy while fostering a culture of continuous improvement and I am immensely proud of what we have accomplished together.’

Vidullanka PLC Director of Operations Roshan Siriwardana said, ‘Securing Gold, Silver, Bronze and a merit at this year’s Taiki Akimoto 5S Awards stands as a proud testament to our leadership excellence, exceptional teamwork, and unwavering commitment to continuous improvement. This clean sweep across the category highlights how we have successfully embedded the globally recognised 5S philosophy into every aspect of our operations-uniting technology, sustainability, and collaboration to achieve world-class performance.’

Anil Jayantha Fernando and U.D. Nishantha Jayaweera assumed duties yesterday as Finance and Planning Deputy Minister and Economic Development Deputy Minister, respectively.

Fernando, who also serves as Minister of Labour, said that ministerial appointments should not be seen as privileges or political manoeuvres but as opportunities to assign responsibilities and ensure effective governance.

The two newly appointed Deputy Ministers were received by Treasury Secretary Dr. Harshana Suriyapperuma, who previously served as Deputy Minister of Finance and Planning.

Their appointments follow last week’s Cabinet reshuffle by President Anura Kumara Disanayake.

Sri Lanka Insurance Corporation General Ltd., (SLICGL) recently conducted an unprecedented national mobilisation movement, with the launch of ‘I Am a Safe Driver’ campaign in every district of Sri Lanka to coordinate one of the largest child safety awareness drives ever undertaken in the country.

SLICGL understands the value and daily commitment of school transport drivers who carry the responsibility of protecting young lives during every journey. Recognising these operators as vital guardians of the nation’s children, SLICGL transformed World Children’s Day, with hundreds of team members from its extensive network of 143 branches and customer service centres located in all provinces, engaging directly with over 8000 school transport vehicles.

The campaign’s scale demonstrates SLICGL’s commitment to leverage its institutional infrastructure for national development. Deploying teams islandwide, the company was able to simultaneously reach urban centres and remote areas, reinforcing a truly inclusive national awareness initiative rather than a limited corporate social responsibility exercise.

Branch teams visited school van parking areas and public vehicle parks in every district from early morning, conducting one-on-one discussions with drivers about essential safety practices. The personal engagement, rather than a mass media campaigns, created meaningful conversations about road safety responsibilities and child protection protocols.

The initiative focused on critical safety practices that every school transport operator must embrace including following speed limits, undertaking daily vehicle condition checks, maintaining safe boarding and alighting procedures, and demonstrating attentive and cordial behaviour that models’ responsibility for impressionable young minds.

The SLICGL branch teams also distributed awareness leaflets focused on safe driving practices, vehicle tags and safety stickers were also placed on school transport vehicles to serve as daily reminders for drivers to prioritise road safety and child protection.

Through direct engagement via the island-wide branch network, SLICGL is establishing sustained connections with school transport operators, going further than a single day’s awareness, but an ongoing dialogue about child safety and responsible driving practices.

SLICGL recognises institutional responsibility surpasses commercial transactions to protecting lives and building safer communities. SLICGL acknowledges the vital contribution of the Police, school van associations, school transport drivers, and community partners whose collaboration made the campaign a success. Special recognition goes to school transport drivers, whose daily commitment to safe transport protects thousands of children nationwide.

Colombo stock market began the week yesterday on a mixed note with the ASPI closing flat, up just 0.01% or 2.36 points to 22,321.08 while the active S and P SL20 fell 0.30% to close 18.66 points down at 6,207.37.

Market turnover was Rs. 5.68 billion on more than 507.4 million shares traded. Foreigners were net sellers with a net inflow of Rs. 45.6 million.

First Capital Research said the Colombo Bourse displayed mixed sentiment throughout the day, with the market dipping in the morning before gradually recovering, largely supported by activity in small and mid-cap shares.

The ASPI closed at 22,321, marking a marginal gain of 2 points compared to the previous session. Both retail and HNW participation remained average.

Top positive contributors to the index included DIAL, CTHR, MERC, GREG, and HARI.

Turnover stood at Rs. 5.7 billion, representing a 22% decline from the monthly average of Rs. 7.3 billion.

The Diversified Financials sector led sector-wise turnover contribution with a 31% share, while the Banks and Capital Goods sectors jointly accounted for 26%. Investor interest in penny stocks persisted, continuing a trend observed last Friday. Meanwhile, foreign investors turned net buyers, registering a net inflow of Rs. 45.6 million.

The Sri Lanka Retailers’ Association (SLRA) presents the Sri Lanka Retail Forum 2025, themed ‘Retail Reimagined – Where AI Meets the Human Edge.’ Scheduled for Thursday, 23 October 2025, at the Grand Ballroom, Shangri-La Colombo, the forum will bring together more than 450 leaders from retail, business, and technology to explore the future of retail innovation at the intersection of artificial intelligence and human connection.

The event will be attended by Digital Economy Chief Adviser to President Dr. Hans Wijesuriya as Chief Guest, setting the tone for a day of thought leadership and collaboration focused on the nation’s evolving digital and retail ecosystems.

Delivering the Keynote Address is Google India Head – Strategic and Emerging Partnerships and Distribution Ecosystem (India and SAARC) Satyendra Khare, who will share insights on ‘Infinite Possibilities’ and the transformative impact of AI on global retail.

The speaker line-up further includes JB Securities CEO and Advocata Institute Chairman Murtaza Jafferjee, Surge Global Founder and CEO Bhanuka Harischandra, Beyond: Putting Data to Work (UK) CEO Paul Alexander, Dialog Axiata PLC Group Chief Analytics and AI Officer Dr. Romesh Ranawana, and Breakthrough Business Intelligence Chief Research Officer Dilini Jayasuriya.

The panel discussion will feature Futureworks at MAS Holdings Director Ahmed Irfan, Clootrack (Sri Lanka, Maldives and Pakistan) Country Director Dr. Rohantha Athukorala, and Hemas Consumer Brands Managing Director Sabrina Esufally, moderated by PepperCube Consultants Ltd., Chief Insights Officer Crystal Nathan. Together, these thought leaders will examine how technology, human insight, and empathy are redefining the customer experience and shaping the next era of retail growth.

This year’s forum is powered by a dynamic network of partners across industries. John Keells CG Auto Ltd., and Jaykay Marketing Services Ltd., coming together as Platinum Sponsors for Retail Forum 2025. Silver Sponsors: Abans PLC, Healthguard Pharmacy Ltd., Singer (Sri Lanka) PLC, Samsung Sri Lanka, and Unilever Sri Lanka Ltd. Associate Sponsors: Vision Care, Perera and Sons Bakers Ltd., DSI, SPAR Supermarkets, Havelock City Mall, Cool Planet Ltd., and CBL Group. The Tech Talk Sponsor is Omak Technologies and NCINGA PTE LTD., while Exhibition Sponsors include Itechro Ltd., EffectZ.AI Ltd., and Essilor Lanka Ltd., Radio Partner, E FM. Azbow Ltd., joins as the Digital Sponsor, Oneticket.lk as the Ticketing Partner, The Ceylon Chamber of Commerce as the Event Partner, Impressions Public Relations as the PR Partner, and Diesel and Motor Engineering PLC (DIMO) as the Logistics Sponsor.

United Petroleum Lanka Ltd. yesterday said it has initiated formal dispute resolution proceedings against the Government of Sri Lanka, citing failure to honour key commitments under an exit agreement signed in April 2025. The company said despite repeated extensions and follow-ups, the Government’s inaction has delayed its withdrawal from the local fuel market, forcing it to terminate the agreement.

In a statement the company said that United Petroleum Lanka Ltd., a significant long-term overseas investor and Australian-owned subsidiary of United Petroleum Group, launched their operations in the Sri Lankan market in August 2024 with immense enthusiasm and commitment.

‘With technical expertise and best practices of Australia’s highly competitive fuel retail industry, United Petroleum Lanka aimed to enhance local energy industry service levels, efficiency, and competition,’ it said.

Following a Government-led expression of interest and due diligence process to attract foreign investment, United Petroleum Lanka was granted a licence to operate and entered a supply, import, and distribution agreements with the Government of Sri Lanka, the Ceylon Petroleum Corporation (CPC), and the Ceylon Petroleum Storage and Logistics Company (CPSTL).

‘The agreements were key to the company’s entry and investor confidence in Sri Lanka’s envisioned liberalised fuel market. United Petroleum Lanka complied with its contractual obligations and continued to operate in good faith,’ the company said.

‘However, the company faced persistent challenges because of the Government’s failure to uphold critical terms of the agreement. These circumstances created an uncertain and economically unsustainable environment, undermining the long-term viability of the company’s investment in Sri Lanka,’ it added.

Following the Government’s deviations from key contractual commitments, United Petroleum Lanka was ultimately compelled to suspend fuel supply operations in December 2024 and withdraw from the Sri Lankan market.

To ensure an orderly exit, United Petroleum and the Government of Sri Lanka entered into an exit Agreement in April 2025, endorsed by the Cabinet and scheduled for completion in early May 2025.

United Petroleum Lanka met all its obligations under the agreement. ‘However, despite repeated follow-ups and extensions granted to allow the Government additional time to fulfil its commitments, a key undertaking from the Ministry of Energy remains unfulfilled,’ the company noted.

Consequently, United Petroleum Lanka was left with no option but to terminate the exit agreement and initiate formal dispute resolution proceedings in October 2025.

United Petroleum Lanka has expressed deep disappointment over the challenges it faced during its operation and now similar challenges have extended to its exit from the country too.

United Petroleum stated that while its entry in Sri Lanka began promisingly and collaboratively, the difficulties that faced it prove the importance of policy consistency, openness, and adherence to contractual arrangements as Sri Lanka continues to attempt to attract and retain foreign investment.

‘United Petroleum Lanka continues to be proud of its integrity and professionalism that it maintained throughout its operating period and throughout its exit process, reaffirming its adherence to international standards of corporate conduct and investor responsibility,’ the statement said.

As Sri Lanka’s exporters face disruption from the removal of the Simplified VAT (SVAT) scheme here at home, competitor Bangladesh has moved in the opposite direction by waiving value-added tax (VAT) on locally sourced raw materials and services used for exports to strengthen competitiveness.

The move is also intended to prepare Bangladesh exporters for the loss of preferential trade status after its graduation from the least-developed country (LDC) category in 2026.

According to a Financial Express report, in a recent directive, Bangladesh’s National Board of Revenue (NBR) clarified that local sourcing of raw materials and services by exporters under a ‘Deemed-Export’ provision will be eligible for VAT exemption, subject to specific documentation and regulatory conditions.

This move follows repeated appeals from Bangladeshi industry associations and exporters who argue that VAT on locally sourced inputs puts them at cost disadvantage compared to bonded-warehouse users, who enjoy duty-free import privileges.

According to the recent NBR clarification, the exemption will apply when goods and services are locally supplied for export purposes.

Bangladesh exporters will need to meet certain compliance requirements, such as conducting transactions in foreign currency and ensuring the supplies are properly documented in the Utilization Declaration (UD) or Utilization Permission (UP).

Furthermore, the exporter must operate under a bonded- or special-bonded warehouse approved by customs or another authorized body.

According to the Financial Express the clarification is intended to eliminate the issue of double taxation on export-bound products that rely on local inputs.

Also, the special fiscal measure is meant for encouraging the growth of backward-linkage industries and reducing reliance on imports.

The clarification became necessary due to widespread confusion and allegations surrounding VAT practices among Bangladesh exporters.