Regulatory & Policy News
View all(94)Fisheries Crisis Averted: President Steps In 📈
President Anura Kumara Dissanayake has intervened to resolve a nine-day Satyagraha protest by madel (beach seine) fishermen, following a high-level meeting at the Presidential Secretariat. • The Core Dispute: Fishermen had been protesting a government ban on using tractor-mounted winches for hauling nets. While operators cite labor shortages, the government and environmentalists raised concerns over ecological damage and the impact on approximately 37,000 small-scale fishers. • Key Outcomes: • Immediate Suspension: Protesters officially called off their strike following the discussion. • Joint Action Plan: All parties agreed to propose a balanced solution within a short period to protect livelihoods without compromising marine safety. • Follow-up Talks: Formal negotiations involving all stakeholders are scheduled to commence this Monday. • Financial Relief: Agreement was reached to involve the Ministry of Finance to address leasing and payment issues faced by mechanized operators during the transition. • Sector Context: The fisheries sector remains a vital economic pillar, contributing roughly 1.9% to GDP. The government is currently prioritizing the National Fisheries and Aquaculture Policy to balance modernization with sustainable resource management.
## Universal High-Speed Broadband Target Set for 2029 📈
The Sri Lankan government has outlined a strategic timeline to provide all citizens with high-speed connectivity by 2029, addressing key infrastructure gaps in the ICT/BPM and digital sectors. • Infrastructure Requirements Capacity Expansion: Nationwide capacity must increase by 25% to ensure universal access, specifically targeting schoolchildren. Tower Rollout: 100 new towers are scheduled for installation in 2024. However, between 600 and 1,000 additional towers are required to meet full demand. Connectivity Gap: While current internet coverage is at 98%, officials clarified this does not yet equate to high-speed broadband standards. • Commercial & Regional Strategy Private Sector Role: A commercial model for tower deployment will be developed, allowing private sector participation via a bidding process. Digital Literacy: The Sectoral Oversight Committee emphasized strengthening digital literacy outside Colombo, utilizing District Secretariat offices for coordination. • Budgetary Oversight The plans were reviewed during 2026 Budget allocation discussions for the Ministries of Digital Economy and Science and Technology.
Armenia Launches Temporary Visa-Free Entry for 113 Countries 📈
Armenia has announced a temporary visa exemption effective until July 1, 2026, aimed at boosting tourism and enhancing international business travel connectivity. • Eligibility Criteria: Residents of 113 countries holding valid residence permits from the US, EU Member States, Schengen Area, or GCC countries (UAE, Bahrain, Qatar, Saudi Arabia, Kuwait, and Oman) can enter visa-free. • Stay Conditions: Eligible visitors can stay for up to 180 days within a one-year period, provided their residence permit is valid for at least six months upon entry. • Market Context: The move follows a significant growth trend in Armenia's travel and hospitality sector. • January 2026 arrivals: 179,409 (up 28.6% YoY). • 2025 total arrivals: 2.26 million (up 2.5% YoY). • Economic Impact: This policy is designed to encourage spontaneous travel and longer exploratory journeys, potentially benefiting service exports and global connectivity for residents in high-income regions, including the Middle East.
TPA Conditions GSP+ Support on Land Rights & Equality 📈
The Tamil Progressive Alliance (TPA) has urged the European Union to link the continuation of GSP+ trade concessions to verifiable progress in human rights and land security for the Malayaga Tamil community. During high-level talks in Colombo, the TPA emphasized that preferential market access must depend on ending the "structural exclusion" of plantation workers. • Key Demands & Rights The TPA, led by MP Mano Ganeshan, highlighted that GSP+ credibility relies on the actual implementation of international conventions. Demands include secure land titles, an end to modern slavery-like conditions in supply chains, and the inclusion of Malayaga Tamil families in the national Rs. 5 million housing scheme, rather than inferior recovery frameworks. • Sector Impact The community remains the backbone of the tea and apparel & textiles sectors—Sri Lanka's primary export earners. Despite the apparel sector topping US$ 5.01 Bn (+5.42% YoY) and tea earnings reaching US$ 1.51 Bn (+4.74% YoY) in 2025, the TPA reports persistent intergenerational poverty and landlessness among these workers. • Trade Context The EU remains Sri Lanka's second-largest export market. Currently, 61% of exports to the EU utilize GSP+ benefits. While the government seeks to re-apply for the facility after the current cycle ends, the TPA warns that ignoring minority land rights and labor dignity undermines the governance logic of the agreement.
### US Tariffs: Sri Lanka Faces Regional Competitiveness Gap 📈
The Opposition has raised concerns over Sri Lanka's current trade position, noting that the country now faces higher US import duties on apparel compared to its regional peers. This follows recent trade deals secured by competitors that have realigned the South Asian export landscape. • Comparative Tariff Rates India: 18% (following a recent interim trade framework). Bangladesh: 19% (reduced from 20% under a new reciprocal agreement). Sri Lanka: 20% (current reciprocal rate as of February 2026). • Impact on the Apparel Sector Garments constitute approximately 70% of Sri Lanka’s total exports to the US. The 20% tariff, while lower than the initially proposed 44%, remains a significant barrier compared to the concessions secured by India and Bangladesh. Industry analysts warn that even a 1-2% difference in duties can shift major orders to regional alternatives, threatening the 300,000+ jobs within the apparel & textiles industry. • Economic Risks Based on provisional projections, the sector could face potential export losses of up to US$ 220 Mn annually under the 20% regime. Competitors like Bangladesh have also secured "zero-tariff" clauses for specific goods made with US-sourced raw materials, further widening the competitiveness gap. _Note: This summary is based on current market data and official statements as of February 13, 2026._
Parliament Flags Discrepancies in Lakvijaya Coal Shipments 📈
The Sectoral Oversight Committee (SOC) on Infrastructure has raised serious concerns over inconsistencies in documentation for coal shipments at the Lakvijaya Power Plant. • Key Quality Issues: Plant reports for the first three shipments recorded a Gross Calorific Value (GCV) below 5,900 kcal/kg, failing to meet standard fuel quality requirements. • Documentation Gaps: Data from load and discharge ports reportedly do not align with findings at the plant level, casting doubt on the reliability of Indian laboratory certifications. • Financial Impact: While penalties were recouped for the first shipment, energy losses from subsequent shipments are deemed non-recoverable. The PUCSL has been directed to calculate the total financial loss caused by using low-quality coal. • Audit Recommendations: The Committee urged the immediate reinstatement of pre-2023 registration frameworks for the Lanka Coal Company (LCC), as recommended by the Auditor General. • Next Steps: The Energy Ministry is to engage an independent laboratory for fresh testing, and action is sought against officials who failed to brief the Cabinet on audit warnings. This oversight aims to safeguard energy sector efficiency and protect consumers from the broader economic impact of procurement irregularities. _(Based on provisional committee reports)_
CBSL Issues Stern Warning Against Local Foreign Currency Transactions 🏛️
The Central Bank of Sri Lanka (CBSL) has issued a public warning regarding unauthorized foreign currency transactions between residents, reiterating that the Sri Lankan Rupee is the sole legal tender for domestic trade. • Regulatory Mandate: Under the Central Bank of Sri Lanka Act, No. 16 of 2023, all transactions between residents must be settled in local currency unless specifically authorized under the Foreign Exchange Act. • Prohibited Activities: Merchants are strictly barred from accepting foreign currency payments from local customers. This includes converting Rupees into foreign currency for credit to foreign currency accounts via Credit or Debit cards. • Legal Consequences: Violators (both payers and merchants) face summary trial before a Magistrate. Convictions carry severe penalties: • A fine up to Rs. 25 million. • Imprisonment for a term up to 3 years. • Or both penalties combined. • National Context: These measures are designed to preserve the integrity of the monetary system and ensure the stability of the domestic currency market. The CBSL urges the business community and the public to comply with statutory requirements to avoid legal action. _Source: Central Bank of Sri Lanka (February 2026)_
SLTDA Withdraws Controversial LGBTIQ Tourism Support 📈
The Attorney General informed the Court of Appeal yesterday that the Sri Lanka Tourism Development Authority (SLTDA) will formally withdraw a letter endorsing projects aimed at promoting and developing LGBTIQ tourism. • Legal Challenge: The withdrawal follows a writ petition filed by groups including the Federation of National Organizations, challenging the legality of the endorsement issued in September 2025. • SLTDA Position: Chairman Buddhika Hewawasam issued a new communication on February 2, 2026, revoking the support to avoid "ambiguity or misinterpretation" regarding the national tourism mandate and institutional integrity. • Industry Context: While the initial letter recognized the potential for market diversification and DE&I (Diversity, Equity, and Inclusion) programs, the government has since clarified that official policy remains focused on cultural heritage, wellness, and adventure experiences. • Current Status: Despite the withdrawal, petitioners argued that the underlying decision had not been formally rescinded. The Court of Appeal has fixed the next hearing for March 4, 2026, to clarify the state's final position.
📈 US-Bangladesh Trade Deal: Implications for Regional Apparel Hubs
Bangladesh has secured a strategic trade agreement with the US, granting zero-tariff access for specific clothing items, a move that reshapes competitive dynamics for South Asian exporters, including Sri Lanka. • Key Tariff Revisions • Headline tariff on Bangladeshi goods cut from 20% to 19%. • Introduction of a zero-tariff mechanism for apparel produced using US-sourced cotton and man-made fibers. • Quota volumes for duty-free entry will be linked to the scale of Bangladesh’s textile imports from the US. • Regional Context & Competition • Bangladesh remains the world's second-largest apparel exporter, with the sector accounting for 80%+ of its export revenue and 4Mn jobs. • The new 19% rate places Bangladesh nearly on par with India (18%), while Sri Lanka currently faces a higher negotiated rate of 20% (down from an initial 44%). • Analysts warn that the "zero-tariff loophole" gives Bangladesh a significant pricing edge over regional peers who rely on non-US raw materials. • Reciprocal Market Access • In exchange, Dhaka will provide "significant preferential access" for US agricultural and industrial goods, including chemicals, medical devices, car parts, and meat. • Bangladesh will also align with US standards for food, drug, and vehicle emissions to facilitate easier entry for American products.
Tariff Overhaul: Sri Lanka Begins Consultations on Four-Band Policy 📈
The Government of Sri Lanka has officially commenced stakeholder engagements to implement the 2026 Budget proposals for a significant tariff system overhaul. The initiative aims to align the domestic economy with global value chains and boost competitiveness. • Key Reform Pillars The reform introduces a simplified Four-Band Tariff Policy with standard Customs Import Duty (CID) rates of 0%, 10%, 20%, and 30%. This replaces the current complex structure to ensure international consistency and transparency. • Phase-out of Para-tariffs A major highlight is the planned removal of para-tariffs, specifically Cess and the Port and Airport Development Levy (PAL). This move is intended to reduce the "anti-export bias" and lower production costs for domestic manufacturers. • Sectoral Impact & Standards • Apparel & Textiles: Proposed removal of the Rs. 100/kg Cess on imported fabric, replacing it with VAT to create a level playing field for local producers. • Agriculture: Imported coconut and palm oil will shift from a Special Commodity Levy (SCL) to the standard VAT/SSCL framework. • ICT/BPM & Manufacturing: Simplified import procedures for capital goods and raw materials are expected to facilitate trade and technological integration. • Global Alignment The new structure follows the United Nations Broad Economic Classification (BEC) Revision 5. Technical guidance is being provided by the World Bank to ensure the transition supports fiscal sustainability and export diversification. _Note: Reforms are primarily slated for implementation by April 2026 based on provisional budget timelines._
Sri Lankan Postgraduate Enrollments in UK Drop 36% Amid Dependants Ban 📈
A significant downturn has been recorded in the number of Sri Lankan students pursuing postgraduate studies in the UK for the 2024/25 academic year, driven primarily by tightened immigration policies. • Overall Decline: International postgraduate enrollments in the UK fell by 10% YoY, contributing to a 6% drop in total international student numbers (approx. 685,565 students). • Sri Lanka Impact: Sri Lanka saw a 36% YoY reduction in postgraduate enrollments, the second-largest decline globally after Nigeria (-39%). • Key Driver: The drop is directly linked to the 2023 ban on dependants for taught postgraduate courses. Sri Lankan applicants historically maintained high dependant-to-main-applicant ratios, making the restriction a major deterrent for family-oriented students. • Shift in Trends: Postgraduate Research: Enrollments in research-oriented courses (exempt from the ban) rose 11% globally as students pivot away from taught degrees. Market Diversification: Students are increasingly opting for alternative destinations or research-based tracks to maintain family accompaniment and better employment prospects. • UK Market Share: Despite the dip, postgraduate studies still comprise 57% (approx. 389,000) of all international enrollments in the UK. _Data based on ApplyBoard Insights and HESA reports as of February 2026._
📈 Cabinet Approves National Mineral Policy 2026
The Cabinet of Ministers has approved the National Mineral Policy 2026, a modernized framework designed to overhaul the sustainable management of Sri Lanka’s mineral wealth. Replacing the outdated 1999 policy, the 2026 version focuses on maximizing national benefit and economic transparency. • Strategic Focus & Value Addition The policy prioritizes transitioning from raw material exports to high-value mineral-based industries. Key objectives include developing a comprehensive mineral resource database and promoting local processing for minerals like graphite, quartz, and mineral sands to boost foreign exchange earnings. • Regulatory & Environmental Reforms • Land Ownership: Establishes new mechanisms to resolve ownership disputes during extraction. • Enforcement: Introduction of a special unit to curb illegal mining and ensure unpaid royalties are recovered. • Sustainability: Aligns with the national “A Thriving Nation – A Beautiful Life” manifesto, emphasizing rehabilitation and minimal environmental impact. • Current Status & Sector Impact Based on provisional data, the government has temporarily suspended licenses for heavy mineral exploration (e.g., ilmenite, rutile, zircon) until the new guidelines are gazetted and presented to Parliament. This "reset" aims to increase the sector’s export contribution, which currently stands at approx. US$ 389 Mn against a potential of US$ 778 Mn. • Investment Outlook The framework seeks to attract foreign technology partners through transparent licensing and joint ventures, moving Sri Lanka up the global mineral value chain.