Sri Lanka unveils a bold trade strategy at the World Economic Forum 2025, focusing on regional market diversification, ESG standards, and new partnerships with Indonesia, China, and Singapore. Discover how the island nation is redefining its global trade role.
Sri Lanka’s Strategic Trade Priorities Unveiled at World Economic Forum 2025
At the World Economic Forum 2025 in Davos, Sri Lanka presented a bold new direction for its trade policy, anchored in diversification, sustainability, and stronger regional integration. Sunil Handunnetthi, Minister of Industry and Entrepreneurship Development, unveiled the country’s strategic roadmap during a high-level dialogue with Kimberly Botwright, Head of Trade Policy at the WEF. In his remarks, Handunnetthi positioned Sri Lanka as a forward-leaning economic player in the Indian Ocean, aiming to shift away from overreliance on traditional partners like the United States and instead pursue dynamic alliances across Asia and Africa.
A central theme of the discussion was Sri Lanka’s geographic advantage as an island nation located at the crossroads of global shipping lanes. Handunnetthi highlighted this strategic location as a foundation for building new trade corridors and bolstering regional supply chains. As the current chair of the Indian Ocean Rim Association (IORA), Sri Lanka is looking to maximize its connectivity to emerging markets. The Minister introduced a proposed trade agreement with Indonesia as a key example of the country’s evolving regional engagement. This effort reflects a conscious pivot toward new economic alliances that can offer resilience against global economic volatility and foster long-term growth.
Minister Handunnetthi also underscored Sri Lanka’s efforts to expand its existing trade relationships with nations such as China and Singapore. The country is currently engaged in active negotiations to enhance these bilateral frameworks, underpinned by a broader commitment to a rules-based international trading system and internal institutional reform. He acknowledged ongoing tariff-related discussions with the United States but pointed to mechanisms like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP) as the foundations for Sri Lanka’s future trade architecture.
Value addition emerged as a cornerstone of Sri Lanka’s export strategy, with a focus on sectors like apparel and tea. The Minister stressed the importance of shifting from raw exports to high-value goods by integrating ESG (Environmental, Social, and Governance) standards into production. This approach aligns closely with WEF’s emphasis on responsible trade and reflects Sri Lanka’s commitment to sustainable economic practices. Embracing ESG, Handunnetthi argued, will not only improve global competitiveness but also ensure that Sri Lankan exports meet the rising expectations of consumers in regions like the EU and the U.S., where compliance with ethical and environmental benchmarks is increasingly non-negotiable.
To address persistent structural barriers to trade, the Minister sought the World Economic Forum’s support in eliminating tariff and non-tariff obstacles, especially those affecting small and medium-sized enterprises (SMEs). He called for targeted assistance to upgrade Sri Lanka’s digital trade infrastructure, including the adoption of single-window customs systems and expanded access to e-commerce platforms. These reforms are designed to make the trade environment more efficient and user-friendly, ultimately positioning SMEs as active contributors to Sri Lanka’s export-driven economy.
Stakeholder engagement was another pillar of the discussion, with Handunnetthi advocating for the creation of WEF-led platforms that would bring together exporters, investors, and regulatory bodies. Groups such as the Joint Apparel Association Forum (JAAF) and representatives from the seafood sector were mentioned as essential voices in shaping inclusive trade policies. These consultations are expected to enhance transparency, streamline certification processes, and secure continued access to markets that demand strict regulatory compliance.
To institutionalize these reforms, the Minister proposed the establishment of a joint WEF–Sri Lanka Task Force. This body would be tasked with monitoring implementation progress, ensuring accountability, and guiding the country’s long-term trade agenda. The proposal reflects a commitment to not just planning reforms, but sustaining them through consistent international collaboration and local stakeholder input.
In his concluding remarks, Minister Handunnetthi reaffirmed Sri Lanka’s intention to build a resilient, rules-based trade ecosystem that champions economic inclusivity and regional cooperation. The Davos appearance was not merely ceremonial; it signified Sri Lanka’s strategic effort to reposition itself as a modern economic actor within the Global South. With its eyes set on new partnerships, ethical production standards, and digital innovation, Sri Lanka’s trade blueprint for 2025 reveals a country ready to shape, rather than simply follow, the contours of global commerce.
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