Towards sustainable growth: Expanding Swiss-Sri Lanka economic cooperation

Switzerland continues to be an important tourism source market for Sri Lanka

Switzerland, one of the world’s most advanced economies and Sri Lanka, a South Asian nation with a strategic location, have maintained diplomatic relations since 1956. Over the decades, their economic cooperation has developed gradually, encompassing trade, investment, tourism, and development assistance. While the scale of bilateral engagement remains modest, both countries continue to explore opportunities for mutually beneficial collaboration amid a shifting global economic landscape.

Bilateral trade

According to Table 01, Sri Lanka’s trade relationship with Switzerland has seen notable shifts between 2018 and 2024. Despite global disruptions caused by the COVID-19 pandemic, Sri Lanka’s exports to Switzerland have shown resilience and growth, rising from $ 122 million in 2018 to $ 153 million in 2024. Although exports dipped to $ 90.9 million in 2020 at the height of the pandemic, the sector demonstrated a strong recovery in the following years.

In contrast, Sri Lanka’s imports from Switzerland have steadily declined, falling from $ 295 million in 2018 to just $ 83 million in 2024. This drop reflects the broader economic challenges faced by Sri Lanka during the period, including a severe foreign exchange shortage and the impact economic crisis. 

As a result of these contrasting trends, the trade balance which had been in Switzerland’s favour from 2018 to 2020 shifted in Sri Lanka’s favour beginning in 2021, marking a significant turning point in bilateral trade dynamics.

According to data published by the Export Development Board, Switzerland is currently Sri Lanka’s 17th largest export destination, accounting for approximately 1.2% of the country’s total merchandise exports. This trade relationship, though modest in scale, is marked by the exchange of high-value goods on both sides.

Sri Lanka’s key exports to Switzerland include seafood, apparel, Ceylon tea, edible fruits and vegetables and precious stones particularly sapphires, which are highly valued in the Swiss luxury market. These sectors have continued to perform despite global headwinds, including the COVID-19 pandemic.

On the import side, Sri Lanka primarily sources high-end products from Switzerland such as electrical and electronic goods, pharmaceutical products, chemicals and perfumes. Additionally, Swiss-made machinery, precision instruments, and luxury wristwatches enjoy a high reputation in the Sri Lankan market for their reliability and craftsmanship. Other Swiss products that are well-regarded locally include premium chocolates and medical devices. 

Switzerland presents a valuable market for a diverse range of Sri Lankan exports that align closely with current consumer trends and import demands. Products with strong growth potential include precious stones particularly Ceylon sapphires which are highly prized in Switzerland’s renowned luxury watch and jewellery industry. Apparel and textiles also show promise, especially in light of recent tariffs imposed by the United States, prompting Sri Lanka to seek alternative markets and given the growing Swiss demand for ethically produced clothing. Ceylon tea and Sri Lankan spices such as cinnamon, pepper and cardamom continue to be sought after for their authenticity, flavour and health benefits, with rising interest in organic and value-added varieties. Processed food items including dried tropical fruits, coconut-based products, herbal tea and ayurvedic products are well-suited to Swiss consumers’ preferences for healthy, convenient and sustainably sourced goods. Additionally, seafood and essential oils present niche opportunities, particularly when backed by quality certifications and strong branding. By prioritising quality, sustainability and product innovation tailored to market needs, Sri Lanka is well-positioned to strengthen and expand its export footprint in Switzerland across multiple high-potential sectors.

Tourism industry

Switzerland continues to be an important tourism source market for Sri Lanka. According to data published by the Sri Lanka Tourism Development Authority, Switzerland ranked as the 17th largest inbound market in 2024, with a total of 29,829 tourist arrivals. As illustrated in Table 02, Swiss tourist arrivals have remained relatively steady in recent years. However, Swiss arrivals accounted for less than 2% of Sri Lanka’s total tourist arrivals in 2024, indicating room for growth in this high-value segment.

Industry sources indicate that Swiss travellers generally spend longer periods in Sri Lanka compared to the average tourist. In 2024, the average duration of stay among Swiss visitors was 12.6 days, significantly higher than the industry average of 8.4 days. This extended stay suggests a deeper engagement with the destination and greater per capita expenditure, making Swiss tourists a valuable market segment.

To attract more visitors from Switzerland, Sri Lanka can enhance targeted marketing campaigns focusing on its nature-based experiences, wellness tourism, adventure travel and cultural heritage, all of which align well with Swiss travel preferences. Promoting eco-tourism, Ayurveda retreats, hiking trails and authentic village experiences through digital platforms and partnerships with Swiss tour operators could strengthen awareness and appeal. Additionally, improving air connectivity, offering tailored travel packages and ensuring consistent service quality would help position Sri Lanka as a preferred long-haul destination for Swiss travellers.

Investment

According to Table 03, the highest annual FDI inflow from Switzerland to Sri Lanka was recorded in 2019. However, investment levels have remained relatively low in recent years, largely due to global uncertainties and Sri Lanka’s domestic economic challenges.

Several sectors in Sri Lanka offer strong potential for Swiss investment, including ICT, agri-processing, tourism, renewable energy and export-oriented manufacturing. To attract more Swiss FDI, Sri Lanka must focus on improving regulatory transparency, offering sector-specific incentives, enhancing infrastructure and maintaining consistent economic policies. The recent visit by a Swiss business delegation in June 2025 reflects a renewed interest in exploring investment opportunities, signalling a positive shift in bilateral economic engagement.

Development cooperation

Switzerland has maintained a longstanding development cooperation partnership with Sri Lanka, focused on supporting peacebuilding, good governance, human rights and sustainable economic development. Through the Swiss Agency for Development and Cooperation (SDC), Switzerland has provided technical assistance and funding for initiatives related to safe labour migration, democratic reforms, various development projects and humanitarian aid initiatives. This multifaceted cooperation reflects Switzerland’s strong commitment to supporting Sri Lanka’s long-term stability, inclusive economic growth and the promotion of safe and responsible labour mobility. 

(The author 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].)