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Govt. opts to re-establish International Trade Office

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The Government has decided to reorganize the existing institutional set-up, regarding foreign trade and re-establish the International Trade Office (ITO) to connect all the relevant institutions, and synergize their work, to boost the external trade sector to the National Economy.This decision was taken on the instructions of President Ranil Wickremesinghe.Sri Lanka can benefit greatly from linking with regional and global value chains and this is a major element of the Government’s economic revival programme, the President’s Media Division (PMD) said.

It said: “The plan is to first integrate into South Asia and then expand to the east; China, Thailand and Indonesia linking to the Regional Comprehensive Economic Partnership (RCEP) which consists of 30% of the world’s GDP, trade and population”.

To achieve this overarching objective, there is no alternative but to formulate a strong institutional structure to manage Sri Lanka’s presence in international trade while removing the existing compartmentalization of trade-related institutions. Thus, the Government has decided to reorganize the existing institutional set-ups and newly establish the International Trade Office (ITO), the PMD said.

“The ITO, once it is established through an Act of Parliament, will be headed by an Ambassador of International Trade, supported by an eminent group of advisors who has expertise in international trade. Designated officers, from all the relevant institutions, will be attached to it. The National Trade Negotiation Committee, which undertakes the Free Trade Negotiations, will also be an integral part of the ITO. As announced in the 2023 Budget Speech, the ITO will initially be established, under the Ministry of Finance, and, subsequently, it will be amalgamated into the Ministry of Foreign Affairs to implement Sri Lanka’s foreign trade development policy, across the world, with enhanced and effective coordination.

“Until the establishment of the ITO is fully completed, the core staff of the institution will come from the Presidential Secretariat. Taking immediate measures to operationalize the Sri Lanka – Singapore FTA (SLSFTA), which entered into force, in May 2018, but has not been operationalized till now, will be the first task of the ITO. The Joint Committee, set up in accordance with SLSFTA, comprising designated officials from both countries, will meet in January 2023 and finalize the modalities to agree on operationalization.

“In parallel, by next January the ITO will resume negotiations of the three FTAs with India, China and Thailand. The Chief Negotiator and the National Trade Negotiation Committee (NTNC), comprising Sub Committees on specific areas, have been appointed by the Cabinet for this task. In parallel, the government plans to resume negotiation of the three FTAs with India, China and Thailand. The 12th round of negotiations with India, the 7th round of negotiations with China and the 3rd round of negotiations with Thailand, will be held during the first two months of 2023.

“It is planned to complete these negotiations, possibly within the next year. Stakeholder consultations will be held with the relevant Chambers/Associations, before and after every round of negotiation, to make them aware of the status of negotiations, as they are the ultimate beneficiaries of the FTAs, with enhanced market access. Already, the first stakeholder awareness programme was held on 17 November, 2022. Moreover, simultaneous actions will also be taken, through this office, to revive the PTA negotiations with Bangladesh and Indonesia.”



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Sri Lanka, India caught in US-Iran ship crisis

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By Shamindra Ferdinando

Iran has sought the Indian intervention, at the highest level, to provide lifesaving support to the crews of empty Iranian vessels stranded just outside Sri Lanka’s 12-nautical mile territorial waters off Galle.

Sources familiar with the issue said that Iran had brought the developing situation to the attention of New Delhi as the crews of almost 20 vessels, included Indian nationals. Sources stressed that the group of vessels that unloaded crude oil a couple of months back were now stranded within Sri Lanka’s Exclusive Economic Zone (EEZ).

The US Navy torpedoed an unarmed Iran frigate, returning from India, on 04 March, 2026, about 19 nautical miles off the Galle coast. The unprovoked attack killed nearly 100 Iranians.

The Iranian Embassy in Colombo has inquired from the Indian High Commission of their response to the situation, sources said. The US has issued a global warning against providing food, water, medicine and other services to the Iranian vessels. The outcome of Iran-India talks on the issue at hand was not known, though sources asserted India may not throw its weight behind Iranian efforts to address the issue.

Responding to The Island queries, sources said both Sri Lanka and India were in a dilemma due to the US warning. India couldn’t ignore the plight of the Indian crew members and the Iranian vessels in its backyard.

The Sri Lankan government remains tight-lipped about the vessels stranded in its EEZ. Our efforts to elicit a response from relevant authorities were in vain. In addition to Indians, there are Bangladeshis among the crew members. Iran has explicitly stated the responsibilities of the countries concerned to provide assistance in terms of international law.

The Iranian position was articulated by its Ambassador to Sri Lanka, Dr.Alireza Delkhosh, recently. In a special statement, Ambassador Delkhosh emphasised that in terms of the Convention on the Law of the Sea (Article 98) as well as SOLAS and SAR

Conventions, Sri Lanka couldn’t refrain from providing the needs of the Iranian vessels stranded in its EEZ.

SLMC leader Rauff Hakeem lambasted the NPP government in Parliament for failing to provide assistance to the Iranian ships. The former Minister alleged that the government was simply carrying out dictates of the US. He strongly criticised the way Foreign Minister Vijitha Herath was handling the issue.

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Namal further remanded

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MP Namal Rajapaksa being brought to the Colombo Magistrate’s Court yesterday. Pic by Nishan S Priyantha

MP Namal Rajapaksa, who is in remand custody over the controversial Airbus deal, was further remanded until October 27 by the Colombo Magistrate’s Court yesterday (13).

Colombo Chief Magistrate Asanga S. Bodaragama made the order after considering submissions by officers of the Commission to Investigate Allegations of Bribery or Corruption and lawyers representing Rajapaksa.

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IMF projects Lankan economic growth to moderate amidst mounting global uncertainties

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Sri Lanka’s economy is expected to sustain its recovery over the next two years, although growth is projected to moderate amid mounting global uncertainties, according to the International Monetary Fund’s (IMF) latest World Economic Outlook.

In its World Economic Outlook 2026: Resilience Under Strain, Urgent Choices, the IMF projects Sri Lanka’s economy to expand by 4% in 2026, slowing to 3.7% in 2027, following estimated growth of 5% in 2025.

Inflation, meanwhile, is forecast to rise to 5.3% in 2026 and 5.4% in 2027, reversing the average deflation rate of 0.5% recorded in 2025.

Unemployment is expected to remain steady at 3.9% throughout the forecast period.

The projections come amid growing pressure on the global economy from the ongoing conflict in the Middle East, elevated energy prices, geopolitical tensions and trade disruptions.

Sri Lanka’s external position is also expected to weaken, with the current account balance projected to shift from a surplus of 1.6% of gross domestic product (GDP) in 2025 to deficits of 0.5% in 2026 and 0.3% in 2027.

The IMF’s outlook points to continued economic expansion in Sri Lanka, but with slower growth, rising inflation and a narrowing external surplus giving way to current account deficits over the forecast period.

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