A meeting was recently held between the Sri Lanka Export Development Board (EDB) and European Commission consultants Paul Baker and Talal Rafi to discuss the potential impact of the EU–India Free Trade Agreement (FTA) on Sri Lanka’s export sectors.
Baker and Rafi have been engaged by the European Commission to assess the implications of the landmark trade agreement for Sri Lanka. Yohan Lawrence, Secretary General of the Joint Apparel Association Forum (JAAF), also participated in the discussion, drawing attention to the challenges the Sri Lankan apparel industry could face once the FTA comes into effect.
Negotiations on the EU–India FTA were concluded on 27 January 2026, with the agreement expected to enter into force following the completion of the necessary legal review, signing and ratification procedures. The agreement is anticipated to significantly strengthen the competitiveness of Indian exports in the European market.
Several labour-intensive export industries, including apparel, marine products, leather and footwear, chemicals, plastics and rubber, sports goods, toys, and gems and jewellery, are expected to benefit from substantial tariff liberalisation. Many products are set to receive duty-free access to the EU market from the date the agreement enters into force.
Speaking at the meeting, EDB Chairman Mangala Wijesinghe underscored the critical importance of the European Union to Sri Lanka’s export economy. He noted that the EU remains Sri Lanka’s second-largest export destination after the United States, accounting for approximately 24% of the country’s merchandise exports.
Wijesinghe also outlined the potential implications of the EU–India FTA for Sri Lanka’s export sector, highlighting both the emerging challenges and potential opportunities for local exporters. Sri Lanka’s exports to EU markets recorded strong growth in 2025, with key destinations such as Germany, Italy, the Netherlands, France and Belgium registering increases compared with the previous year.
He further emphasised the importance of preserving Sri Lanka’s preferential access to the EU market under the GSP+ scheme, particularly as Indian exports are expected to become more price-competitive following the implementation of the EU–India FTA.
People’s Bank Records Record LKR 32.6 Billion Pre-Tax Profit in First Half of 2026
People’s Bank maintained its strong growth momentum during the six months ended June 30, 2026, delivering robust profitability supported by sustained core banking performance, improved margins and disciplined financial management.
The Bank recorded a standalone Profit Before Tax (PBT) of LKR 32.6 billion during the period, alongside a record Profit After Tax (PAT) of LKR 20.5 billion. The results reflect the continued strengthening of the Bank’s earnings capacity and financial position amid an evolving global and domestic economic environment.
The strong performance was supported by broad-based growth across the Bank’s core income streams. Total operating income increased 17.7% to LKR 95.2 billion, compared with LKR 80.9 billion in the corresponding period of the previous year. Net interest income also grew 18.9% to LKR 82.4 billion, up from LKR 69.3 billion.
The Bank’s Net Interest Margin (NIM) improved further to 4.4%, compared with 4.1% a year earlier, reflecting effective asset and liability repricing and disciplined balance sheet management. The improvement highlights the Bank’s ability to convert sustained business growth into stronger earnings while maintaining a prudent approach to credit and risk management.
The Bank’s balance sheet remained stable, with total assets standing at LKR 3.8 trillion. Gross loans and advances surpassed the LKR 2 trillion milestone for the first time, reaching LKR 2.1 trillion, demonstrating continued momentum in the Bank’s core lending activities.
The growth in lending, combined with stronger core income generation and improved margins, provided a solid foundation for continued profitability. At the same time, prudent balance sheet management further strengthened the Bank’s capital and liquidity position during the first half of 2026.
The Total Capital Adequacy Ratio (CAR) improved to 18.2% as at June 30, 2026, compared with 17.9% at the end of the first quarter and 16.5% at the end of 2025, remaining comfortably above the regulatory minimum. The Bank’s Tier I Capital Adequacy Ratio stood at 12.7%.
EDB Discusses Impact of EU–India FTA on Sri Lanka with EU-Appointed Consultants
