Sri Lanka's goods exports fell 1.3 percent year-on-year in July 2026 to $1.29 billion, with significant declines in apparel and tea sectors attributed partly to regional instability affecting key markets.
Sri Lanka's merchandise exports contracted by 1.3 percent in July 2026, reaching $1,285.31 million compared to the same month in the previous year, according to data from the country's export promotion office. The decline was primarily driven by weakening performance in two major export categories: apparel and tea, which together represent a substantial portion of the nation's export earnings.
Apparel and textile exports fell 8.82 percent year-on-year to $437.59 million in July. The sector experienced declines across major destinations, with shipments to the United States, United Kingdom, and European Union dropping by 6.28 percent, 5.73 percent, and 8.61 percent respectively. Tea exports performed even worse, declining 17.22 percent to $116.73 million. The Middle East, which receives approximately 35 percent of Sri Lanka's tea exports, was particularly affected, with regional exports falling 47.93 percent. Notably, tea shipments to individual markets within the region experienced severe contractions, including a 73.09 percent drop to Iran and a 78.54 percent decline to Iraq.
Export Development Board chairman Mangala Wijesinghe attributed the slowdown to challenging geopolitical conditions, noting that 40 percent of apparel exports typically flow to the United States. Other sectors also registered significant declines, including seafood exports, which fell 60.31 percent to $15.58 million. However, when examining a longer timeframe, cumulative export earnings for January through July 2026 totaled $8,188.32 million, representing a 5.05 percent increase compared to the same period in 2025. Officials expressed cautiously optimistic expectations, suggesting the challenging export environment may improve within three to four months.