Weak investment climate, policy uncertainty weighing down exporters

• Ceylon Chamber survey finds policy and regulatory uncertainty, labour and energy costs among main constraints cited by exporters

More than half of exporters believe the country’s investment climate is worse than that of competing economies, reflecting persistent concerns about regulatory uncertainty and structural constraints affecting export competitiveness, according to the Ceylon Chamber of Commerce Export Barometer Survey 2026.

The Export Barometer Survey was conducted by the Economic Intelligence Unit of the Ceylon Chamber of Commerce over a nine-week period from 26 November 2025 to 21 January 2026 using an online survey platform. It received 90 responses, including 38 SME firms and 52 large firms, and was supplemented by 10 key informant interviews.

The survey found that a majority of exporters consider Sri Lanka’s investment environment to be either slightly worse or much worse than regional peers, underscoring unease within the export sector about policy consistency and the broader business climate.

Exporters identified labour costs, energy prices, regulatory barriers, trade openness, and infrastructure and logistics as key challenges affecting their operations and competitiveness.

Despite these concerns, the survey suggests exporters continue to pursue growth opportunities. Around 55% of respondents said they had identified new markets for their products and services, while about 80% indicated that free trade agreements are important to their business strategies.

The findings also show exporters actively diversifying both products and markets. About 28% reported exporting new products or services to existing markets, while 27% said they were exporting new products or services to entirely new markets. Another 28% are exporting existing products and services to new markets, while around 15% are selling new products and services in the domestic market. Only 1% of respondents said they had not identified new opportunities.

The results indicate that while exporters view the policy environment as challenging, many firms are continuing to expand and adapt their strategies.

Respondents also outlined several areas where they believe Government action could improve the business environment. Among the key proposals was the introduction of a National Single Window and integrated digital systems to simplify import and export procedures and improve coordination across customs, ports, tax authorities and other regulatory agencies.

Exporters also highlighted the need for greater support for digital tools, including e-payments, digital identity systems and traceability infrastructure to help businesses comply with global standards and modernise operations.

Businesses further called for stronger capacity-building initiatives, including training, funding, mentorship, tax incentives and concessional financing to help firms—particularly SMEs—expand, innovate and retain skilled employees.

In addition, exporters emphasised the need for better coordination across Government institutions, trade chambers, donor agencies and industry associations to support market research, validate new business ideas and encourage partnerships between established companies and startups.

The survey also stressed the importance of adaptive, long-term policy frameworks that evolve with sectoral and technological changes while benchmarking Sri Lanka’s regulatory environment against international best practices.