India emerged as Sri Lanka’s fastest-growing major export destination in the first quarter of 2026, with shipments rising 12.02% year-on-year to $287.49 million, underscoring a growing regional trade pivot.

 

According to the Sri Lanka Export Development Board, the increase helped India overtake the UK as Sri Lanka’s second-largest export market during January-March.

 

Overall export earnings rose 1.6% year-on-year to over $4.3 billion, supported by steady merchandise trade and stronger services performance. However, exports to the United States – Sri Lanka’s largest single market – declined 3.38% to $749.38 million, with industry sources pointing to weaker demand and the impact of tariff measures.

 

Growth in sectors such as coconut-based products, electronics, and processed food helped offset a downturn in apparel exports, which remain heavily dependent on Western markets.

 

Despite a March slowdown driven by global shipping disruptions linked to Middle East tensions, the quarterly performance signals a gradual shift toward regional markets as Sri Lanka seeks to diversify export demand and reduce reliance on traditional destinations.