Business

Rupee pressure squeezes industries as import costs surge

Published

4 months ago

2026/05/21

Sahan Weerasooriya

Indhra Kaushal Rajapaksa

…exporters gain little as deeper structural weaknesses persist

Sri Lanka’s weakening rupee is placing severe pressure on industries heavily dependent on imported raw materials, fuel, machinery, and spare parts, with small and medium enterprises (SMEs) facing the gravest threat to survival, according to Indhra Kaushal Rajapaksa.

Speaking to The Island Financial Review, Rajapaksa warned that while a depreciating currency may offer exporters temporary exchange gains, the broader economic impact is proving damaging across multiple sectors of the economy.

“Most businesses are struggling because Sri Lanka imports a significant portion of its industrial requirements. As the rupee weakens, costs rise sharply across the board,” he said.

Industries are responding through a combination of price increases, aggressive cost-cutting, delayed investments, and efforts to source cheaper alternatives. However, Rajapaksa stressed that many firms are operating under shrinking profit margins and mounting uncertainty.

“Companies are trying to survive by passing some costs to consumers, reducing operational expenses, and postponing expansion plans. But SMEs are under extreme pressure because they have limited reserves and weaker access to foreign currency,” he noted.

Rajapaksa observed that large corporates are better positioned to withstand currency shocks due to stronger balance sheets, export earnings, and greater financial flexibility. In contrast, smaller enterprises remain highly vulnerable to fluctuations in import costs and financing conditions.

He identified construction, vehicle imports, pharmaceuticals, electronics, logistics, and manufacturing industries reliant on imported inputs among the sectors worst affected by the rupee depreciation.

“These sectors depend heavily on foreign supplies. Every decline in the rupee immediately increases production and operating costs,” he said.

While export-oriented industries may appear to benefit from currency depreciation, Rajapaksa cautioned that the gains are often overstated.

“There is only a short-term conversion advantage when export earnings are brought back into rupees. But many exporters also depend on imported raw materials and machinery, so their own costs increase simultaneously,” he explained.

He added that the burden of currency depreciation ultimately falls on ordinary consumers through rising food prices, higher fuel and transport costs, more expensive imported goods, and accelerating inflationary pressures.

“Consumers are paying the price indirectly every day,” he said.

Rajapaksa acknowledged that some companies are attempting to localise supply chains and increase the use of domestic raw materials. However, he pointed out that Sri Lanka currently lacks the industrial scale and production capacity to fully replace imports competitively.

“There is growing interest in local sourcing, but Sri Lanka cannot produce everything locally at the required scale or cost efficiency,” he said.

The continued volatility of the currency is also affecting investor confidence, with businesses finding it increasingly difficult to plan ahead.

“Investors value stability. Frequent currency fluctuations create uncertainty and discourage both local and foreign investment,” Rajapaksa warned.

He called on the government to focus on stabilising the economy, strengthening foreign reserves, supporting SMEs and export industries, reducing unnecessary imports, encouraging local production, and ensuring consistent economic policies.

“Policy consistency is critical. Businesses need confidence to invest, expand, and create jobs,” he said.

Rajapaksa also cautioned that employment could suffer if economic pressures continue, particularly in import-dependent sectors and smaller businesses struggling to remain operational.

“Some export sectors may create opportunities, but it may not be enough to offset job losses elsewhere,” he observed.

Describing the current crisis as both cyclical and structural, Rajapaksa said Sri Lanka’s economic vulnerabilities extend beyond short-term currency movements.

“There are immediate pressures from both global and domestic financial conditions, but there are also deeper structural issues such as high import dependence, a narrow export base, and low productivity,” he said.

“Unless meaningful structural reforms are implemented, these problems will continue to recur.”

By Ifham Nizam

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Business

CIF, the world’s favorite multi-surface cleaning brand, arrives in Sri Lanka

Published

10 hours ago

2026/09/23

Upali Newspaper Admin

CIF, the globally recognized multi-surface cleaning brand, has officially entered the Sri Lankan market, expanding the range of international home-care solutions available to local consumers.

CIF products are now available at Cargills, Keells, Glomark and Celeste, as well as online through Daraz and uStore, at a retail price of Rs. 900 for 500ml. Shop CIF online at https://ustore.lk/collections/cif

Used by households around the world, CIF is known for its powerful cleaning performance and ability to tackle everyday dirt and some of the toughest cleaning challenges around the home.

Its introduction to Sri Lanka comes as consumers increasingly seek cleaning products that combine performance, convenience and versatility, particularly solutions that can be used across multiple areas and surfaces within the home.

One cleaner. So many possibilities.

From stubborn kitchen grease and grime to limescale around sinks and dirt that builds up on frequently used surfaces, CIF is designed to provide powerful cleaning performance while helping make every day cleaning simpler.

The brand’s multi-surface proposition allows consumers to address a range of household cleaning needs with one versatile solution, bringing greater convenience to modern cleaning routines.

CIF’s entry into Sri Lanka also brings the brand’s global philosophy closer to local consumers eventually helping people restore and rediscover the beauty of the places and things around them through effective everyday cleaning.

With its combination of global recognition, multi-surface versatility and powerful cleaning performance, CIF’s arrival provides Sri Lankan consumers with a new international option in the household cleaning category.

The world’s favorite multi-surface cleaning brand is finally here in Sri Lanka.

Just CIF it!

Business

A sustained wave of Indian assistance to Sri Lanka showcases defining shift in developmental diplomacy

Published

21 hours ago

2026/09/23

Sahan Weerasooriya

Transport Minister Bimal Rathnayake and Indian High Commissioner Santosh Jha at the plaque unveiling ceremony for the Moragahakanda Bridge project, supported by Indian grant assistance.

By Sanath Nanayakkare

An evolving approach to regional diplomacy was brought into sharp focus with the recent foundation-laying ceremony for the Moragahakanda Bridge in Matale.

Jointly launched by Indian High Commissioner Santosh Jha and Minister of Transport, Highways and Urban Development Bimal Rathnayake, this 175-metre span is far more than a routine civil engineering project. It serves as the physical manifestation of a broader USD 450 million reconstruction package deployed by India in the wake of Cyclone Ditwah, which severely fractured the island’s transport arteries.

Foreign aid is too often discussed in cold, macroeconomic abstractions. Yet, every so often, a consistent pattern of targeted assistance alters the landscape of bilateral relations, offering a clear window into how regional partnerships evolve out of necessity and goodwill.

Across the country today, a remarkable narrative of multi-layered cooperation is unfolding.

From critical post-disaster infrastructure and maritime routes to grassroots agricultural uplift and institutional capacity-building, India’s developmental footprint is shifting unmistakably toward an organic, people-centric model of shared resilience.

What distinguishes this latest wave of assistance is its deliberate pivot from emergency support to permanent, climate-resilient transformation. When Cyclone Ditwah initially paralysed regional connectivity, India’s immediate response was marked by the rapid deployment of temporary Bailey bridges.

Today, that swift humanitarian intervention has matured into a structural blueprint: the Moragahakanda project stands as the vanguard of 13 permanent bridges being built across Sri Lanka’s provinces by IRCON International Limited, complemented by upcoming railway upgrades and modern signaling systems backed by a USD 250 million Line of Credit.

The true signature of this diplomatic shift lies in its breadth, operating simultaneously across multiple tiers of society:

Institutional Governance: Delegations of Sri Lankan parliamentarians and senior administrative officers regularly travel to India to study public policy frameworks, legislative systems, and administrative practices.

Economic Lifelines: Financial mechanisms, such as viability gap funding for the Nagapattinam-to-Kankesanthurai passenger ferry service, continue to shrink geographical distances, reviving coastal commerce and tourism.

Grassroots Empowerment: Specialised capacity-building programmes tailored for local stakeholders – ranging from state officials to rural dairy farmers -ensure that development reaches deep into the island’s hinterlands.

By aligning immediate disaster relief with long-term infrastructure, institutional capacity, and human capital, India and Sri Lanka are demonstrating how neighbours can build safer, more connected futures together, grounded firmly in mutual respect and tangible progress.

Business

Bring your own bag to book fair, CEA urges

Published

21 hours ago

2026/09/23

Sahan Weerasooriya

By Ifham Nizam

The Central Environmental Authority (CEA) yesterday urged visitors to the Colombo International Book Fair to bring reusable bags to carry their purchases, as part of a drive to reduce single-use plastic waste at the event.

CEA Director General R. S. P. Kapila Rajapaksha said large quantities of plastic, particularly “sili sili” bags, had been used to carry books at previous book fairs.

“We urge visitors to bring an environmentally friendly, reusable bag when they come to buy books. This simple step can help reduce the use of single-use plastic and protect the environment,” Rajapaksha said.

The book fair opens on September 25, with the CEA and the Sri Lanka Book Publishers’ Association launching an awareness programme targeting book sellers, food vendors and visitors.

The programme will be conducted under the theme “Read Smart, Carry Smart”, focusing on reducing polythene and plastic use throughout the exhibition.

The CEA said the use of plastic bags is also subject to regulations issued under the Consumer Affairs Authority Act. Gazette Extraordinary No. 2456/41, dated October 1, 2025, prohibits the free distribution of handled “sili sili” bags to consumers. Where such bags are sold, the charge must be included in the customer’s bill.

The CEA said food outlets at the book fair would also be required to comply with regulations prohibiting a range of single-use plastic products.

These include plastic straws and stirrers, disposable plastic plates, cups, spoons, forks and knives, as well as polythene-based food wrappers commonly known as lunch sheets.

The CEA said it had discussed the requirements with relevant stakeholders and reached agreement to ensure that prohibited products are not used at food outlets within the exhibition premises.

The authority urged both traders and visitors to cooperate with the initiative and help make this year’s book fair a more environmentally responsible event.