A meeting was held recently between the Sri Lanka Export Development Board (EDB) and consultants to the European Commission, Paul Baker and Talal Rafi, to exchange views and insights on the potential impact of the EU\u2013India Free Trade Agreement (FTA) on Sri Lanka\u2019s export sectors.<\/p>\n\n\n\n
Baker and Rafi have been engaged by the European Commission to assess the implications of the landmark trade agreement for Sri Lanka. Yohan Lawrence, Secretary General of the Joint Apparel Association Forum (JAAF), also joined the discussion, highlighting the challenges that Sri Lanka\u2019s apparel industry could face once the FTA becomes operational.<\/p>\n\n\n\n
Negotiations on the EU\u2013India FTA were concluded on 27 January 2026, and the agreement is expected to enter into force following the completion of the required legal review, signature, and ratification procedures. The FTA is expected to significantly improve the competitiveness of Indian exports in the European market. Key labour-intensive export sectors, including apparel, marine products, leather and footwear, chemicals, plastics and rubber, sports goods, toys, and gems and jewellery, will benefit from substantial tariff liberalisation, with many products gaining duty-free access from the date the agreement enters into force.<\/p>\n\n\n\n
Addressing the meeting, EDB Chairman Mangala Wijesinghe emphasised the importance of the European Union to Sri Lanka\u2019s export economy, noting that the EU remains Sri Lanka\u2019s second-largest export destination after the United States and accounts for approximately 24% of the country\u2019s merchandise exports. He also provided a detailed assessment of the potential implications of the EU\u2013India FTA for Sri Lanka\u2019s export sector, highlighting both the emerging challenges and opportunities for local exporters. Sri Lanka\u2019s exports to EU markets recorded strong growth in 2025, with major destinations including Germany, Italy, the Netherlands, France and Belgium registering increases over the previous year.<\/p>\n\n\n\n
Wijesinghe also stressed the importance of safeguarding Sri Lanka\u2019s preferential access to the EU market through the GSP+ scheme, particularly as Indian products become increasingly price-competitive following implementation of the FTA.<\/p>\n\n\n\n
Joining the discussion, European Commission consultant and international trade economist Paul Baker observed that economic projections and long-term modelling indicate that the EU\u2013India FTA could substantially increase India\u2019s exports to the European bloc while also strengthening foreign direct investment flows into India. He noted that while Indian products are expected to become more price-competitive in the EU market following tariff liberalisation, the European Union\u2019s increasing emphasis on sustainability, environmental performance, traceability and regulatory compliance would continue to create opportunities for exporters capable of meeting these requirements.<\/p>\n\n\n\n
Baker therefore encouraged Sri Lankan exporters to reassess their product and market strategies, improve value addition and strengthen compliance with evolving EU sustainability and regulatory standards in order to remain competitive. Yohan Lawrence, representatives of the apparel industry, meanwhile, raised concerns over the potential impact of the FTA on Sri Lanka\u2019s apparel exports to the EU. Particular attention was drawn to the rules of origin and regional cumulation arrangements applicable to fabrics and other inputs sourced from India and subsequently used in garments manufactured in Sri Lanka for export to the EU under GSP+.<\/p>\n\n\n\n
Source: Daily News<\/p>\n","protected":false},"excerpt":{"rendered":"
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