Low Global Integration Favours Sri Lanka Under EU 'Buy European Only' Policy 📈

The EU’s move toward strategic autonomy via a 'Buy European Only' policy may inadvertently benefit Sri Lanka due to its low integration into high-tech global supply chains. According to Frontier Research, the policy prioritizes EU-produced goods in strategic sectors, but current impacts on Sri Lanka remain indirect. Key Economic Insights • Core Exports Safe: Traditional sectors like tea, rubber, and apparel & textiles are not currently targeted as the EU remains highly reliant on these consumer goods. • GSP+ Dependency: Export earnings face a direct threat only if the policy dilutes GSP+ preferences; however, no clarity on such changes has been provided yet. • Strategic Opportunity: Protectionism in high-tech may cause low-tech manufacturing to "trickle down" to Sri Lanka as China and ASEAN focus on restricted high-tech fields. • Tech Barriers: If Sri Lanka shifts into ICT/BPM, medical services, or electronics, stricter EU eligibility rules could create significant market access barriers. Priority EU Sectors • The policy specifically targets high-value industries: Defence, AI, Space, Quantum Technology, Clean Tech, and Payment Systems. _Note: Analysis based on provisional research data regarding EU strategic shifts as of February 2026._