India Becomes Sri Lanka’s Fastest-Growing Major Export Market in Q1 2026

New Delhi, April 24, 2026: India has emerged as Sri Lanka’s fastest-growing major export destination during the first quarter of 2026, signalling a visible shift in Colombo’s export geography towards regional markets. According to data cited by News On AIR and the Sri Lanka Export Development Board, Sri Lanka’s exports to India rose 12.02% year-on-year to reach US$287.49 million during January–March 2026.

The growth helped India overtake the United Kingdom and become Sri Lanka’s second-largest export destination in the first quarter of the year. The United States remained Sri Lanka’s largest single export market, but exports to the US declined 3.38% to US$749.38 million during the same period, reflecting weaker demand and pressure from tariff-related measures.

Sri Lanka’s overall export earnings for the January–March 2026 period stood at US$4.30 billion, registering a 1.59% year-on-year increase. Merchandise exports during the quarter reached US$3.38 billion, while services exports were estimated at US$921.11 million, supported by sectors such as ICT/BPM, construction, financial services, transport and logistics.

The rise in exports to India was mainly driven by stronger shipments of petroleum oils, animal feed and areca nuts. In March alone, Sri Lanka’s exports to India grew 4.44% to US$95.47 million, supported by demand for petroleum products, animal feed and selected industrial raw materials under the broader framework of the Indo-Sri Lanka Free Trade Agreement.

The quarterly trend is significant because it comes at a time when Sri Lanka is trying to diversify its export markets and reduce excessive dependence on traditional Western destinations. Apparel exports, which remain heavily linked to the US and European markets, faced weakness, but gains in coconut-based products, electronics, processed food and services helped cushion the overall performance.

The Sri Lanka Export Development Board said the first-quarter performance reflects resilience in the country’s external sector despite a moderation in March. Total exports in March 2026 stood at US$1.46 billion, down 5.2% compared with March 2025, but up 9% compared with February 2026, suggesting a month-on-month recovery in export momentum.

For India and Sri Lanka, the numbers carry wider economic meaning. India’s rise as a faster-growing export destination strengthens regional trade integration and gives Sri Lankan exporters a large nearby market at a time of global uncertainty. For Sri Lanka, deeper access to India could help create a more balanced export model, while for India, it reinforces New Delhi’s position as an economic anchor in the Indian Ocean region.

The development also fits into a broader pattern of South Asian economic realignment, where supply chains, food trade, energy-linked commerce and regional demand are becoming increasingly important. As shipping disruptions, tariff pressures and weak demand in Western markets continue to affect global trade, Sri Lanka’s growing export link with India may become one of the key stabilising pillars of its 2026 export strategy.