Sri Lanka is a country rich in natural resources. The geographical location, the favorable climate, and the surrounding ocean have always been assets to this beautiful country. Blessed with these resources, and skilled people, Sri Lanka has been an important trade point. Besides, it has been the home to many industries since ancient times. Although times have changed, still Sri Lanka has the potential of engaging in many different industries of various sectors. And yes, most of the industries in Sri Lanka, such as tourism, agriculture, fisheries, mining, and the ceramic industry have taken total advantage of the resources gifted by nature.
The main industries of Sri Lanka include,
- Tourism Industry
- Apparel Industry
- Fishing Industry
- Agriculture Industry
- Tea Industry
- Rubber Industry
- Coconut Industry
- Gem and Jewelry Industry
- Handloom Industry
- Spice Industry
- Porcelain and Ceramic Industry
- Traditional Mask Industry
- Information Technology Industry
Of course, there are many interesting facts about these industries in Sri Lanka. Let’s have a look at them and how these industries contribute to the economy of Sri Lanka.
1. Tourism Industry
The tourism industry is the third largest foreign exchange earner of the Sri Lankan economy. And yes, Sri Lanka is a beautiful island that is rich with exceptional natural and cultural endowments. So, the tourism industry mainly revolves around the inherent natural, cultural, historic, and social assets of Sri Lanka and its people. This has made tourism one of the main industries in Sri Lanka, and a major contributor to Sri Lanka’s economy.
The major areas of investment in the tourism industry in Sri Lanka are,
- Tourist accommodation and related services such as hotels, restaurants, villas, resorts, spas, and homestays
- Leisure and recreational activities such as adventure activities, sports, entertainment complexes, and theme parks
- Shopping complexes
- Camping, dolphin, and whale watching
- Water sports and activities such as surfing and scuba diving
- Adventure activities – adventure parks, rafting, waterfall abseiling, hot air ballooning, ziplines
Contribution of Tourism to the Economy of Sri Lanka
The tourism industry accelerates the economic growth of the country by earning high foreign exchange and reducing poverty by providing direct and indirect employment opportunities to the locals. Moreover, the industry contributed both directly and indirectly, to the provision of goods and services to the tourist sector. In fact, the industry contributes to three high-priority goals of developing countries which are, the generation of income, employment, and foreign-exchange earnings.
The contribution of travel and tourism to the GDP of Sri Lanka two years back was 12.6 %.
Measures Taken for the Development of the Tourism Industry
The authorities took several steps over the past few years to attract the right type of tourists to the country and to ensure their satisfaction. Some of them are as follows.
- Improving domestic tourism
- Taking measures to improve the global image of Sri Lanka
- Making an industry-friendly tax regime
- Developing infrastructure to meet the industry requirements
- Introducing a tour bus service
- Improvement of services provided by airlines currently flying to Colombo and attracting new airlines to begin services
- Providing necessary training for tour guides, homestay hosts, and other formal and informal sector service providers
2. Apparel Industry
The apparel industry of Sri Lanka has gained an excellent reputation all around the world for manufacturing high-quality apparel for iconic fashion brands in the world.
There are many parties in the apparel industry that have long-term relationships with well-known multinational retailers. Sri Lanka has always managed to meet their standards. Besides, Sri Lanka is also well-known for ethical production. Those are indeed reasons for the stability of the apparel industry in Sri Lanka. Moreover, the greatest emphasis on Sri Lanka’s products is on quality. So, the competitive edge of Sri Lankan apparel is on value addition.
Further, the leading sub-sectors of the apparel industry are, establishing textile-manufacturing facilities, providing technological equipment, and acting as a warehousing hub.
Contribution of the Apparel Industry to the Economy of Sri Lanka
By now, you already know that the apparel and textile manufacturing industry is the most significant contributor to the economy of Sri Lanka. In fact, it is Sri Lanka’s primary foreign exchange earner today.
The USA and the United Kingdom have been the highest buyers of Sri Lankan apparel throughout the decades and the industry has qualified to maintain its standards. Sri Lanka is also famous for non-guilt production. Owing to all these reasons, the apparel industry provides direct and indirect employment opportunities to a large number of locals. In fact, it has created job opportunities for millions of operational-level workers to managerial-level employees including graduates from leading universities.
If we consider the statistics related to the apparel industry of Sri Lanka, its exports contribute 6% to the country’s GDP and account for 40%of all exports. It provides direct employment to 350,000 workers. There is a well-built supply chain in the apparel industry and this has created livelihood opportunities for more than 700,000 individuals.
Measures Taken for the Development of the Apparel Industry
Some of the important measures taken for the development of the apparel industry are as follows.
- Continuous improvements as per requirements and adapting of new technology and equipment
- Implementing horizontal specialization
- Integrating innovative designs
- Creating global marketing networks
- Training groups of companies to increase their effectiveness through improved productivity
3. Fishing Industry
Sri Lanka is an island with an extensive coastline. Specifically, it has a territorial sea of 21,500 km2 and a coastline of 1340 km. Also, it has a large number of reservoirs, lakes, and rivers in all parts of the country. This has provided opportunities for both inland and deep-sea fishing.
Further, the fisheries industry in Sri Lanka consists of three main subsectors. They are coastal fishing, deep sea fishing, and inland fishing. Deep sea fishing is dependent on the season while inland fishing in freshwater as well as in brackish waters is available at any time of the year. There are fishing techniques such as stilt fishing in some parts of the country, which has also become a tourist attraction. All these sectors have made sure that Sri Lanka has a rich supply of fish and seafood.
Besides, Sri Lanka is a quality seafood exporter. Mainly they supply tuna species, crabs, prawns, and mollusks to international markets. Moreover, the industry has adhered to the latest technology in product development, processing, and packaging techniques to ensure that the products that reach the international market are superior in quality. Sri Lankan lobsters, crabs, squid, cuttlefish, and shark fin are famous in the international seafood market.
Contribution of the Fishing Industry to the Economy of Sri Lanka
The fishing industry contributes about 2.7% to the GDP of Sri Lanka.
The sector has key buyers from countries like the USA, Japan, Italy, France, the Netherlands, and Hong Kong.
Measures Taken for the Development of the Fishing Industry
The Department of Fisheries and Aquatic Resources always takes the required steps to assure the development of the fishing industry. Some of the measures that they took over the past years are as follows.
- Deployment of E-business
- Reducing waste and time consumption
- Increasing cost-effectiveness
- Establishment of modern and technically improved vessel monitoring systems to prevent national fishing vessels from drifting to other countries’ territorial seas
- Development of cold chain facilities, harbor, road, and highway infrastructure to ensure quick transportation
- Providing fresh and high-quality seafood export range
4. Agriculture Industry of Sri Lanka
Agriculture has been one of the main industries of Sri Lanka since ancient times. That is because this country has always been a fertile tropical land with the potential for the cultivation and processing of a variety of crops. In the past, the people of Sri Lanka used to grow their own food and there was hardly any foreign agricultural food trade. Yet, now, crop cultivation is mainly trade-oriented.
Sri Lanka’s primary food crop is rice. Therefore the primary form of agriculture in Sri Lanka is paddy cultivation or rice production. As you may already know, rice is the staple food of 21 million Sri Lankans and more than 30% of the total labor force in the country is directly or indirectly involved in rice production. Farmers cultivate paddy during two seasons: Yala and Maha.
The three main agricultural crops of Sri Lanka are tea, coconut, and rubber. Tea is another main crop in the central highlands and it is a major source of foreign exchange. Moreover, Sri Lankan spices are one of the most famous exports since ancient times. Thus, we would be discussing these four industries specifically in this article later. Apart from that, fruits, vegetables, and oilseed crops are also cultivated in the country.
Contribution of the Agriculture Industry to the Economy of Sri Lanka
In Sri Lanka, the agriculture sector contributes about 7.4 percent to the national GDP. Around 30% of the population is employed in the agricultural sector.
Measures Taken for the Development of the Agriculture Industry
The Ministry of Agriculture is responsible for ensuring the success of the agriculture industry in the country. You can find below some of the measures they have taken to support this industry.
- Improving productivity in the agriculture sector by adopting mechanized farming
- Increasing cultivation of higher-value cash crops such as fruit, flowers, and other export-oriented crops
- Increasing private investment in agriculture and reform policies that limit the expansion of the sector
- Developing a competitive pricing structure
- Development of transportation facilities
5. Tea Industry in Sri Lanka
The tea plantation was introduced to Sri Lanka in 1867 and since then Ceylon Tea has grown to be the top agricultural export of the country. Besides, the country produces tea throughout the year and it has a total production of about 340 million kilograms per annum.
Tea is the main crop in the central highlands and southern inland areas of the island. So, the main tea-growing areas are Nuwara Eliya, Uva province, Dimbula, Kandy, Sabaragamuwa, and Southern province.
Ceylon Black Tea, Ceylon Green Tea, and Ceylon White Tea are celebrated around the world for their finest Sri Lankan tea flavors. Besides, Sri Lanka has the majority of the most expensive tea varieties in the world. Sri Lanka is also well-known for producing the cleanest tea in the world in terms of minimum pesticide residues.
Contribution of the Tea Industry to the Economy
Tea is simply a major source of foreign exchange. It accounts for 2% of the GDP and generates roughly $700 million annually for the economy of Sri Lanka.
It provides direct and indirect employment to nearly 1 million people.
The tea industry exported a total of 228 MnKgs of tea in 2021 and has added to the national economy a revenue of about US $ 1,320 million.
Measures Taken for the Development of the Tea Industry
Some of the measures that the authorities have taken for the improvement of the tea industry are as follows.
- Reducing the costs per kilo of made tea.
- Going forward with integrated productivity and quality strategy.
- Using mineral and organic inputs in order to improve the soil quality to achieve environmental and economic sustainability.
6. Coconut Industry of Sri Lanka
Coconut is one of the major agricultural crops of Sri Lanka. Besides, Sri Lanka is the fourth largest coconut product exporter in the world. Mainly coconut is consumed as a food and many value-added products are made using various parts of the coconut tree.
In fact, coconut is an essential part of Sri Lanka’s cuisine. Sri Lankans prepare desiccated coconut, coconut oil, virgin coconut oil, coconut butter, coconut milk, coconut cream, coconut flour, and coconut chips using coconuts. Therefore two third of the harvest is consumed locally and the rest is exported.
Apart from that, ornaments, souvenirs, coir products like brooms, and many other products are made using these coconuts. Hence, there is nothing wrong in mentioning that the coconut industry has many benefits. Besides, it makes the living for thousands of innocent Sri Lankans.
Contribution of the Coconut Industry to the Economy of Sri Lanka
The coconut industry earns around 5% of the main agricultural export revenue in Sri Lanka. About 30% of total coconut production is used for coconut-based industries, and most of these products are used for export.
This industry provides livelihoods to around 700,000 and indirect employment to another 135,000.
Measures Taken for the Development of the Coconut Industry
Several strategies are recommended by the Coconut Research Institute of Sri Lanka to develop the country’s coconut crop. Some of them are as follows.
- Genetic improvement of coconut
- Development of in-vitro propagation
- Enhancement of soil quality
- Development of improved farming systems
- Mitigation and adaptation to climate change effects
- Development of good pest and disease management systems
- Development of technologies for value addition and process improvement
- Mechanization of farm and industrial operations
- Development of technologies to reduce the cost of production
- Ensuring a steady supply of raw materials.
Further, they are paying attention to continuous process improvement, quality enhancement, machinery, and warehouses, as well.
7. Rubber Industry in Sri Lanka
Rubber is another main crop grown in Sri Lanka. A number of value-added products are manufactured by processing natural raw rubber, here in this country. They include rubber bands, beadings, gloves, auto parts, sports goods, footwear, tires, tubes, and household items like floor mats, carpets, hoses, and hot water bottles. So, considering the high number of products manufactured, the exports of rubber products are also high. Thus, rubber is one of the main industries in Sri Lanka.
Sri Lankan Rubber products have a major market in the USA, Germany, Italy, Belgium, and the UK. Sri Lanka is still the largest exporter of latex crepe and sole crepe rubbers. Besides, Sri Lankan products are internationally accepted for their high quality and durability. In fact, Sri Lanka’s industrial solid tires hold the pride of being the global market leader. So, owing to these reasons, rubber has indeed become one of the important industries in Sri Lanka.
Contribution of the Rubber Industry to the Economy of Sri Lanka
Rubber and rubber products consist of around 8% of Sri Lanka’s total annual export value. The rubber products exports have grown by 4.7 % in the past years and with an average growth rate of nearly 0.92%. Rubber Industry contributed over US$ 890 million in 2019 to the economy of Sri Lanka.
The industry provides gainful employment for about 300,000 persons. It also contributes to mitigating global warming through the natural forest cover provided by the rubber plantations.
8. Gem and Jewellery Industry of Sri Lanka
Also known as the cradle of treasures, Sri Lanka has a long traditional association with the global gem and jewelry trade. Besides, the precious natural gemstones of Sri Lanka gain high value all around the world. Out of about 200 minerals that are classified as gemstones, around 75 varieties are found in Sri Lanka.
There are three major market segments in the market for gems and jewelry in Sri Lanka. They are domestic, tourist and export. In the global market, Sri Lanka is regarded as a producer of high-quality gems and is reputed to be a quality cutting and finishing center. Hence, the gemstones of Sri Lanka meet the highest industry standard. Sri Lanka has both a traditional jewelry industry and an export-oriented industry.
The production chain of the Sri Lankan gem and jewelry industry includes gem miners, gem traders, gem polishing and cutting, gem exporters, jewelry manufacturers, and retailers.
Contribution of the Gem and Jewellery Industry to the Economy of Sri Lanka
The gem and jewelry industry has been one of the most important industries in the Sri Lankan economy. It is an important source of foreign exchange earnings and employment generation.
The main activities of this can be mentioned as mining, manufacturing, and trading. Moreover, total employment of 300,000 is involved in these sectors. Besides, the total value of the gem and jewelry trade is estimated at about USD 550 million annually.
9. Handloom Industry
Sri Lanka has a rich history of traditional textiles such as handloom and batik. The handloom industry creates value-added products by mixing traditional woven patterns and color schemes and then converting them into beautiful textile designs. It is a craft-based industry and the element of art and craft present in the handlooms makes it significant in the domestic and global market.
The Sri Lankan Handloom industry consists of three main segments namely community business, provincial council-based handloom business, and private business. However, Sri Lankan handlooms have a demand in both local markets and export markets. The handloom products include sarees, sarongs, lungis, curtains, cushion covers, bed covers, soft toys, and accessories like wallets and pencil cases. Most of the products are made using rayon, polycotton, and silk yarn.
The demand for these products increases because they are environmentally and socially friendly products. The abundance of raw materials in the country is a strength for the industry.
Contribution of the Handloom Industry to the Economy of Sri Lanka
The industry helps to develop sustainable employment opportunities. It plays a vital role in reducing poverty in rural areas.
The industry requires low capital investments. This attracts more investment opportunities in the sector.
Measures Taken for the Development of the Handloom Industry
You can find below some measures that help the handloom industry grow.
- Providing more training facilities for upcoming weavers who wish to enter the industry with fresh ideas
- Commencement of technology and design programs in State universities and Vocational education centers to train new entrants to the industry
- Providing monetary support and other facilities to newcomers to the industry
10. Spice Industry of Sri Lanka
Since the early days, Sri Lanka was famous all around the world for the uniqueness of its spices. Ceylon cinnamon and pepper are celebrated worldwide up to this time. The global food and beverage industry, the pharmaceutical industry, and the personal care product industry consume most of the spices manufactured in Sri Lanka. Hence, the demand for Sri Lankan spices is simply impressive.
The main types of spices produced in Sri Lanka are Cinnamon, Pepper, Cloves, Cardamom, Ginger, Vanilla, and nutmeg. Sri Lankan pepper manufacturers mainly produce black pepper and white pepper from their harvest. Black and white pepper are both fruits of the same type of pepper plant. But they are processed differently to bring out different colors and strengths.
In addition to the raw spices, Sri Lanka exports essential oils made of these spices too. Sri Lanka exports a range of essential oils including Cinnamon Oil, Pepper Oil, Cardamom Oil, Citronella Oil, Clove Oil, and Nutmeg Oil for export markets.
Contribution of the Spice Industry to the Economy of Sri Lanka
The spice industry provides a livelihood for many people because over 70% of cultivated land is smallholdings and home gardens.
However, Sri Lanka exports around 30,000 tons of spices each year.
Sri Lanka manufactures about 6% of the global demand for spices. Cinnamon is the third largest agricultural export in the country and the industry employs nearly 400,000 people directly or indirectly. Pepper earns an average revenue of USD 87 million through these exports. Moreover, Ceylon Cardamom earns an export revenue of USD 607k.
Sri Lanka exports these spices mainly to countries like India, UAE, Saudi Arabia, and Iraq.
11. Ceramic and Porcelain Industry of Sri Lanka
The Ceramic and Porcelain Industry has been a famous creative industry in Sri Lanka for a long time thanks to the variety and abundance of raw materials endowed on the island.
Tableware, ornamental and utility ware, sanitary and bath ware, and tiles are the sub-sectors of the ceramic industry. Products like earthenware and stoneware products, cement, glass, red brick, roofing tiles, and terracotta products are manufactured through this industry. Besides, ceramic and porcelain items in Sri Lanka have a good export market. Other than direct exports, the products are supplied to local hotels, packaging, and construction industries as well.
Sri Lanka is rich in raw materials needed for the ceramic and porcelain industry such as kaolin, ball clay, feldspar, silica quartz, and dolomite. Of course, the quality and purity of these materials contribute to the high standards of the products.
The strengths of the industry include skilled workforces, competitive labor costs, excellent management, traditional art used for designs, research and development facilities, and high ethical standards. The total workforce engaged in this industry is over 20,000.
Measures Taken for the Development of the Ceramic and Porcelain Industry
The authorities take different measures from time to time aiming at the improvement of the ceramic and porcelain industry. Some of the measures taken accordingly are as follows.
- Conducting product design and technology development programs
- Market development
- Providing trade facilitation services
- Using marketing strategies to build the global image
12. Traditional Mask Industry of Sri Lanka
The traditional mask industry of Sri Lanka is not just one of the main industries in Sri Lanka, but also a part of the culture and religious practices in contemporary days. In fact, the culture of using these traditional masks was directly connecting the imagination, beliefs, and spirituality of human beings. Although these traditional masks were used for healing ceremonies in the past, now the uniqueness and colors, and designs of these masks have gained commercial profitability.
There are three types of masks namely Raksha masks, Sanni masks, and Kolam masks. These masks depict the various forms of devils as per the beliefs. However, there are about 24 mask types that represent the devil forms.
Nowadays many people use these masks as wall hangers and souvenirs. The unique colors, shapes, and features of these masks make them interesting to foreigners as well as locals. So, there is a high demand for mask products both from locals and tourists.
The industry is mainly based in Ambalangoda, a city in the southern part of Sri Lanka. In these areas, the mask industry is more like a family trade because the craftsmanship has been passed from generation to generation within the same families. Many craftsmen use the wood from trees like Rukkattana and Diyakanduru for manufacturing masks.
And if you like to witness the process of making these masks, in Ambalangoda there is a mask museum, a mask-making workshop, and a mask showroom for you to visit and delight yourself.
13. Information Technology Industry of Sri Lanka
The Information and Communication Technology (ICT) sector in Sri Lanka is one of the most dynamic sectors, which contributes significantly to the investment, employment, innovation, and economic growth of the country. In fact, Sri Lanka has been adapting to new technology in the world and has created opportunities for skilled groups to be involved in economic growth through modern businesses related to Information Technology. So, the software industry has been growing industry in Sri Lanka in recent years. It brings foreign currency to Sri Lanka through the provision of sophisticated software products to the global market.
The leading sub-sectors of the industry are software, telecommunications equipment and infrastructure, and mobile applications. Besides, the industry provides more employment opportunities for graduates. Sri Lanka has been competing with the software companies of the world with the help of the talented workforce of the country. And yes, this has helped the country earn a reputation in the global industry.
Contribution of the Information Technology Industry to the Economy of Sri Lanka
The ICT services sector in Sri Lanka has delivered steady growth in the recent past. The National Export Strategy of Sri Lanka aims to generate $5 billion in revenue and create 200,000 direct jobs and establish 1000 startups in the Information Technology and Business Process Management sector by 2025.
Total credits from the Information Communication Technology sector amounted to approximately $1 billion in 2020. The sector grew by 120 % from 2015 to 2020 with current exports at over $1 billion. It is one of the highest growth areas in the economy and the fifth-largest export segment.
Measures Taken to Develop Information Technology Industry
Information and Communication Technology Agency (ICTA) is implementing programs to ensure the development of IT in cities as well as rural areas.
In fact, there is a five-pronged strategy for the e-Sri Lanka initiative. They are as follows.
- Building information infrastructure
- Developing ICT human resources
- Modernizing government, and delivering citizen services
- Using ICT for economic and social development
- Promoting Sri Lanka as a destination for Information Technology
Steps have been taken for further development of the country as a base for information technology, call centers, and outsourcing.
The Bottom Line
Although the country is facing challenges in the upliftment of all these industries due to the current economic crisis and the after-effects of Covid – 19 pandemic, Sri Lanka has a positive idea about the future of the industrial sector. Several measures have been taken by the government and the private sectors for the continuous functioning and development of industries.
With the resources available in the country and the skilled workforce of the country, hopefully, Sri Lanka will be able to overcome the challenges and achieve continuous economic growth through industries in the future. So, we are hoping for a better future for the country, along with improvements in these important industries in Sri Lanka.