Business
Shinkansen Moment for Sri Lanka: Raghuraman calls for radical export pivot as Japan backs regional value chain
Sri Lanka must engineer a “Shinkansen effect” in its export strategy or risk being left behind in a rapidly reorganising global economy, warned Indo Lanka Chamber of Commerce and Industry President M. Raghuraman, setting the tone for a high-powered policy dialogue at the Japan–Sri Lanka Business Cooperation forum held on Monday at the JAIC Hilton.
Raghuraman’s call for radical reform came amid a broader push by Japan and Sri Lanka to reposition the island as a strategic node in a regional industrial and logistics corridor linking India, Japan and the wider Global South.
The event, organised by Japan External Trade Organization (JETRO) and the Japan-Sri Lanka Business Co-Operation Committee, brought together policymakers, industry leaders and Japanese investors to map out a new export-led growth model.
“Sri Lanka cannot afford incremental change,” Raghuraman said. “We need a Shinkansen effect — a radical transformation in how we plug into regional and global value chains.”
With India projected to expand its middle-income population from 430 million to over 700 million by 2030, Raghuraman described the subcontinent as a “pot of gold just 22 miles away.” Yet Sri Lanka, he cautioned, has failed to fully capitalise on its proximity, particularly through delayed negotiations on upgrading existing trade arrangements into a more comprehensive economic partnership.
Echoing this regional logic, Toyokazu Nagamune, Regional Representative for South Asia at Japan’s Ministry of Economy, Trade and Industry (METI), framed the corridor within Tokyo’s evolving economic security doctrine.
“With rising geopolitical risks and protectionism, Japan is diversifying supply chains,” Nagamune said.
“It is neither realistic nor cost-efficient to localise entire supply chains within a single country. That is why regional cooperation — especially between India and Sri Lanka — is critical.”
Japan is actively encouraging investment in strategic sectors such as semiconductors, batteries, solar panels and rare earth components in India. But Nagamune stressed that Sri Lanka has complementary strengths — from high-purity rubber to skilled electronics assembly — that can integrate into these value chains.
He cited practical examples: Sri Lanka supplying rubber components for compressors manufactured in India; high-purity silicon inputs for solar cell production; and value-added intermediate goods that enhance cost competitiveness across the corridor.
Secretary to the Ministry of Trade, Commerce, Food Security and Co-Operative Development K.A. Vimalenthirajah acknowledged that policy recalibration is overdue.
“We need to create an enabling environment for manufacturers and shift from merely promoting trading entrepreneurship,” he said. “Sri Lanka must position itself as a preferred destination facilitating both investors and exporters.”
Vimalenthirajah identified three priorities: expanding physical connectivity — including ongoing capacity enhancements at the Colombo Port; strengthening “soft enablers” such as comprehensive free trade agreements and mutual recognition of standards; and institutional reforms including result-oriented single-window systems for trade and investment.
Confidence-building through policy consistency, he added, is paramount to attracting long-term capital.
From the Japanese private sector perspective, Takayuki Himeno, Chief Research Manager at Mitsubishi Research Institute, Inc., underscored that infrastructure alone will not secure Sri Lanka’s ambitions as a logistics hub.
“Sri Lanka’s strategic location is an advantage, but it is no longer enough,” Himeno said. “The challenge is fragmentation. Ports, airports and industries operate in silos. Physical infrastructure must be synchronised with data connectivity.”
Drawing on MRI’s two decades of experience managing Japan’s national single window and customs systems, Himeno pointed to digital integration — including port community systems and streamlined customs processes — as essential to reducing lead times and boosting export competitiveness.
Moderating the discussion, Ruvini Fernando, Head of Financial Advisory at Deloitte Sri Lanka, framed the conversation within Sri Lanka’s urgent need to diversify exports and identify new product lines and markets.
“When Sri Lanka is looking at development through export promotion and new market access, this is a very timely discussion,” she observed.
The strategic thrust emerging from the forum was clear: Sri Lanka’s small domestic market — just over 21 million people — should not be seen as a limitation but as a catalyst to integrate outward into regional production networks.
For Japan, the message is about resilience and cost-competitive diversification. For India, it is about scaling manufacturing depth. For Sri Lanka, it is about moving decisively from raw material exports to value-added components — and from policy inertia to execution.
By Ifham Nizam
Business
Low-quality coal shipment affects Lakvijaya coal power plant operations
Operations at Sri Lanka’s main coal-fired power facility, the Lakvijaya coal power plant, suffered a significant disruption soon after a new shipment of coal was introduced, raising concerns over generation stability and environmental emissions.
Energy analyst Dr. Vidura Ralapanawa said in a social media post that the plant began using coal from “Ship 11” on Wednesday, following confirmation from officials of the Ceylon Electricity Board (CEB).
However, almost immediately after the new batch of coal was fed into the system, the plant’s generation capacity began to decline due to the poor quality of the fuel.
According to Dr. Ralapanawa, the plant’s output dropped by about 82 megawatts overall. Unit 1 recorded a drop of 45 MW, Unit 2 fell by 15 MW, and Unit 3 declined by 22 MW shortly after the coal was introduced.
The situation worsened later in the night when two coal mills in Unit 3 reportedly became clogged around 11 p.m., causing a rapid fall in generation capacity. Unit 3, which normally operates at a higher output level, was said to be running at around 170 MW following the malfunction.
Coal mills are a crucial component in coal-fired power generation. They grind raw coal into a fine powder before it is fed into the boiler for combustion. Each generating unit at the Norochcholai facility is equipped with five coal mills, and any obstruction in these systems can severely affect plant operations.
When mills become clogged, plant operators often have to rely on diesel-fired burner guns to stabilise the flame inside the boiler. While this helps maintain combustion, it significantly increases operating costs because of the high price of diesel.
The heavy use of diesel has another consequence. According to Dr. Ralapanawa’s post, when diesel firing increases, the plant’s Electro-Static Precipitators (ESPs) must be shut down. ESPs are designed to capture and remove particulate matter such as fly ash before emissions are released through the chimney.
With the ESPs switched off, large amounts of fly ash may be released into the atmosphere, potentially affecting surrounding communities.
Dr. Ralapanawa further noted that the coal shipment appears to have low calorific value, low volatile matter, and high ash content, all of which reduce combustion efficiency. In addition, the coal reportedly has a low grindability index, making it harder to pulverise and increasing the likelihood of mill blockages.
He added that while the immediate clogging of the mills may be cleared within a day, the underlying quality issues with the coal could make the problem persistent.
The development comes amid earlier assurances from officials of the Ceylon Electricity Board that the Norochcholai plant could be operated effectively even with lower-quality coal supplies.
The Norochcholai facility, with an installed capacity of 900 MW, is the largest power station in Sri Lanka and a critical component of the national grid. Any disruption to its operations can have wider implications for the country’s electricity supply, potentially forcing the system to rely on more expensive oil-based power generation.
Engineers are currently working to address the clogged mills and stabilise generation, but energy analysts warn that unless the fuel quality improves, similar operational issues could recur.
By Ifham Nizam
Business
CSE regains some positive terrain but challenges remain
CSE trading yesterday was positive overall on account of local economic growth prospects but concerns deriving from West Asian tensions lingered.
The market is still recovering from previous days’ uncertainties, market analysts said.
The All Share Price Index went up by 256 points, while the S and P SL20 rose by 63.8 points. Turnover stood at Rs 5.68 billion with nine crossings.
Seven crossings were reported in HNB Finance where 130 million shares crossed to the tune of Rs 1.1 billion; its shares traded at Rs 8.50, LMF four million shares crossed for Rs 348 million; its shares traded at Rs 87, Commercial Bank 661,000 shares crossed for Rs 142 million; its shares traded at Rs 215, Seylan Bank (Non-Voting) 750,000 shares crossed for Rs 49 million; its shares sold at Rs 75.50, ACL Cables 500,000 shares crossed for Rs 49 million; its shares traded at Rs 98, HNB 100,000 shares crossed for Rs 43.2 million; its shares sold at Rs 432 and Access Engineering 500,000 shares crossed for Rs 38.5 million and its shares fetched at Rs 77.
In the retail market companies that mainly contributed to the turnover were; HNB Finance Rs 331 million (34.8 million shares traded), Lanka Credit and Business Finance Rs 184 million (21.6 million shares traded), LOLC Holdings Rs 180 million (320,000 shares traded), Commercial Bank Rs 167 million (774,000 shares traded), Softlogic Capital Rs 138 million (twelve million shares traded), Sampath Bank Rs 124 million (789,000 shares traded) and ACL Cables Rs 123 million (1.26 million shares traded). During the day 330 million share volumes changed hands in 36639 transactions.
It is said that the banking and financial sectors performed well. HNB Finance was active in the financial sector, while Commercial Bank and HNB were active in the banking counters.
Further, National Development Bank has received Colombo Stock Exchange approval in principle to list Rs 16 billion of 11.50, 11.04 and 11.85 percent debentures, it said in a CSE filing.
NDB will issue 120 million Tier 2, listed, rated, unsecured, subordinated, redeemable Basel III compliant GSS+ bonds with a non-viability conversion, at Rs 100 each.
Yesterday the rupee was quoted at Rs 310.70/85 to the US dollar in the spot market, weaker from Rs 310.30/60 the previous day, dealers said, while bond yields were broadly steady.
By Hiran H Senewiratne
Business
Indian Ocean under fire: Parliament explodes over the sinking of ‘IRIS Dena’
A new crisis looms with a second Iranian vessel at the doorstep
Sri Lanka’s parliament became a secondary battleground yesterday as the sinking of the Iranian frigate IRIS Dena ignited a fierce debate over national sovereignty, regional maritime priciples, and the government’s perceived ‘strategic paralysis.’
While the Navy’s rescue of 32 sailors was initially painted in shades of heroism, Opposition MPs have now unfurled a narrative of missed warnings and geopolitical betrayal.
In a scathing address, Opposition firebrand Chamara Sampath Dissanayake challenged the circumstances of the vessel’s arrival in Sri Lankan waters. The IRIS Dena had been a guest of the Indian Navy during the MILAN-2026 exercises just days prior. Dissanayake alleged that at the conclusion of the fleet review, the vessel was effectively ‘put out’ of India, leaving the crew with no choice but to steer toward Sri Lanka.
“This was a deliberate attempt by the host to put a guest in harm’s way,” Dissanayake charged, stopping just short of naming India directly while making the implication undeniable. He argued that Sri Lanka had been ‘set up’ to deal with the fallout of a targeted strike that occurred only 11 nautical miles from Galle.
The debate took a darker turn when SJB MP Mujibur Rahman dropped a bombshell regarding the timing of the attack. Rahman alleged that the IRIS Dena had signalled for permission to enter Sri Lankan waters 11 hours before it was struck by U.S. torpedoes.
“Why did the authorities keep silent?” Rahman demanded. He blasted the government for failing to act on humanitarian grounds, suggesting that Colombo’s hesitation provided the necessary window for what U.S. Defense Secretary Pete Hegseth termed a ‘Quiet Death.’ Rahman’s critique painted a picture of a government ensnared in superpower machinations, unable to uphold the principles of the Indian Ocean as a ‘Zone of Peace.’
Responding to the barrage of questions, Cabinet Spokesman Dr. Nalinda Jayatissa confirmed a chilling new development: a second Iranian vessel is currently positioned in the Exclusive Economic Zone (EEZ) off Colombo.
While Jayatissa assured the House that the President and the Security Council are ‘fully aware’ and making ‘necessary interventions’ to protect those on board, the lack of specific details fueled further anxiety. Political analysts suggest that the government’s failure to announce a clear, proactive neutral policy has left it in a state of ‘vacillation,’ unable to decide whether to grant refuge to the second ship or risk another tragedy on its doorstep.
The parliamentary clash was punctuated by the visit of former president Ranil Wickremesinghe to the Iranian Embassy yesterday to offer condolences for the passing of Supreme Leader Ayatollah Ali Khamenei. Wickremesinghe had warned on March 2 – just 48 hours before the sinking – that the current ‘leadership eviction’ methodology in the Middle East could destabilise the Indian Ocean.
As the death toll from the IRIS Dena stands at 87 with 60 still missing, the ‘can of worms’ opened in parliament reveals a nation at a crossroads. The government’s silence during the Dena’s final hours and its current ‘intervention’ with the second vessel will likely define Sri Lanka’s standing in a rapidly fragmenting global order.
As the House adjourned, one question remained hanging in the air: In the face of a superpower conflict, does Sri Lanka have the ‘backbone’ to be truly neutral, or is it merely a spectator to its own maritime destiny?
by Sanath Nanayakkare
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