Sri Lanka's combined merchandise and services exports reached US$10.49 billion during January to July 2026, marking a 5.5% year-on-year increase and representing the first time the country has achieved this milestone within a seven-month period.
Sri Lanka's export sector demonstrated sustained growth in the first seven months of 2026, with total exports crossing the US$10 billion threshold for the first time during such a period. Combined merchandise and services exports reached approximately US$10.49 billion from January through July, according to the Export Development Board, reflecting a 5.5% increase compared to the same timeframe in 2025. The achievement underscores the resilience of Sri Lanka's external trade sector amid evolving global market conditions.
Merchandise exports remained the dominant contributor to overall export performance, generating US$8.19 billion during the seven-month period, representing a 5.05% year-on-year increase. Services exports demonstrated stronger growth momentum, reaching US$2.3 billion with a 7.02% increase. High-value service sectors including information technology, business process management, construction, financial services, and transport logistics continued to drive diversification of the export portfolio.
However, July 2026 presented a mixed picture, with merchandise exports declining slightly by 1.3% compared to July 2025 to reach US$1.29 billion, while services exports grew 3.75% to US$351.92 million. Several traditional export sectors faced headwinds during this month. Tea exports fell 17.22% year-on-year, primarily due to weak demand in Middle Eastern markets, particularly the United Arab Emirates, Iran, and Iraq. Apparel and textiles exports declined 8.82%, reflecting subdued consumer demand globally, while seafood exports contracted 60.31%. Coconut-based products also experienced a 9.89% decline.
Conversely, select sectors demonstrated strong performance. Electrical and electronic components surged 99.74% in July, driven by insulated wires and cables exports growing 150.15%. Spices and concentrates jumped 95.98%, with pepper exports rising 450.32%. Rubber-based products increased 3.17%, supported by industrial gloves exports up 19.01%. Over the seven-month period, several sectors posted robust growth, including electrical and electronic components up 57.69%, processed food and beverages up 19.23%, and spices up 14.32%.
Regionally, India emerged as Sri Lanka's second-largest export destination with cumulative exports surging 36.16% to US$688.47 million, while exports to the United States—the leading destination—declined marginally by 1.10% to US$1.71 billion. Turkey recorded exceptional growth of 92.48% cumulatively, driven substantially by tea exports increasing 130.37%. European Union markets, accounting for roughly 25.5% of merchandise exports, remained relatively stable with only a 0.50% cumulative decline despite a 14.59% monthly decrease in July.