Beyond borders: Closer look at France-Sri Lanka economic cooperation

France has consistently ranked among the top 10 tourism source markets for Sri Lanka in recent years   

France and Sri Lanka have been steadily building economic ties in recent years, with cooperation expanding across trade, investment and tourism. While the relationship remains modest in scale compared to larger regional partners, both countries stand to benefit from deeper commercial engagement. This article examines bilateral trade, investment, tourism as well as French contributions through development aid.  

Bilateral trade

As illustrated in Table 01, Sri Lanka’s exports to France have increased rapidly since 2021 compared to the pre-pandemic period. In contrast, Sri Lanka’s imports from France declined from $ 261.3 million in 2018 to $ 148.6 million in 2024. Consequently, the trade balance, which was in favour of France in 2018, has shifted in Sri Lanka’s favour since 2020. The shift in the trade balance can be attributed to a combination of factors.

On one hand, Sri Lanka’s export sectors, particularly apparel, tea, rubber products and seafood recovered strongly after the pandemic, with increased demand from European markets, including France. On the other hand, imports from France declined, due to Sri Lanka’s foreign exchange constraints, reduced consumer demand and efforts to prioritise essential imports amid economic challenges during recent past. As a result, the overall trade dynamic has tilted in Sri Lanka’s favour since 2020.

Sri Lanka’s major imports from France include machinery, pharmaceuticals, perfumes, wine, electrical and electronic equipment, etc.

Tourism industry 

As illustrated in Table 02, France has consistently ranked among the top 10 tourism source markets for Sri Lanka in recent years. France contributed approximately 4.5% of Sri Lanka’s total tourist arrivals as shown in the Table 02. According to statistics compiled by the Sri Lanka Tourism Development Authority (SLTDA), in 2024, the average duration of stay for French travellers was 11.21 days, which is notably higher than the overall average duration of 8.4 days. This longer stay duration highlights the strong appeal of Sri Lanka as a destination for French tourists seeking immersive and extended travel experiences.

Although France is a popular destination for holidaymakers from Sri Lanka, the number of travellers remains limited to the upper-middle class and affluent segments, and there is no reliable data available on the exact number of travellers.

Investments

Table 03 shows the FDI inflow from France to Sri Lanka. In 2024, there was a notable increase, with French FDI reaching $ 135.7 million, accounting for nearly 18% of the total FDI inflow of $ 761 million.

In 2018, Michelin, the leading French tire manufacturer, acquired Camso-Loadstar, making it one of the most prominent French investors in Sri Lanka’s industrial sector. Sri Lanka’s thriving tourism sector presents attractive opportunities for French investors.

French development aid

France has been a consistent development partner to Sri Lanka, primarily through the Agence Française de Développement (AFD). Since 2005, AFD has supported a broad range of sectors, including energy, agriculture, urban development, and water supply. Recent projects include Geographical Indication (GI) certification for Ceylon Tea and support for enhancing air quality monitoring and reporting systems in Sri Lanka. France has also supported Sri Lanka’s foreign debt restructuring efforts as a key member of the Official Creditor Committee, collaborating to develop sustainable and effective debt relief solutions. This enduring partnership highlights France’s commitment to Sri Lanka’s sustainable development and economic recovery.

(The writer is a researcher holding a master’s degree from the University of Colombo, with over a decade of experience in both private and non-profit sectors, including extensive consultancy work with international development organisations. He can be contacted via [email protected]).