High Value and Export-Oriented Agribusiness: Unlocking Agri-food Sector Potential in Sri Lanka

Series: Agriculture Research Serie

The study identifies six export clusters with strong growth potential: cinnamon, other spices such as pepper, coconut-based products, fruit and vegetable processing, seafood, and tea. Coconut-related exports exceeded USD 1 billion in 2025, fruit and vegetable processing exports grew by 302% over the past decade, and cinnamon holds an EU Geographical Indication registration since 2022. Seafood exports have grown under preferential access through GSP+.

The study finds that the sector’s growth is constrained by a multilayered tariff structure that creates a systematic anti-export bias, ad hoc para-tariff revisions that raise regulatory uncertainty, and underinvestment in agricultural research and development, which averaged below 1% of agricultural GDP against the FAO benchmark. It recommends phased reform of the Special Commodity Levy, a rules-based tariff calendar, redirected investment toward R&D and extension, and institutional reforms including regional plantation company lease tenure extension and a single digital window for agricultural input approvals.